After a few weeks of speculation, Disney officially acquired YouTube network Maker Studios for $500M with potential performance earn-outs which could add another $450M bringing the deal to near unicorn levels of $950 million. The acquisition is a big win not just for Maker’s venture backers including Greycroft Partners and Upfront Ventures but also the greater Los Angeles tech scene.
Of course, Maker’s notable exit is also welcome news for the YouTube startup ecosystem, which has grown immensely over the past few years and continues to draw new investments. According to CB Insights data, startups operating in the YouTube multi-channel network (MCN) space (including Maker) have raised nearly $345M in disclosed funding across 38 deals from both venture backers and strategic investors such as AMC Networks and Warner Bros. Entertainment.
And while Maker is certainly the largest exit, it isn’t the first YouTube startup to be acquired. Polaris Partners-backed BalconyTV was acquired by The Orchard earlier this month, while Dreamworks bought Greycroft-backed AwesomenessTV last year for $95M.
With Maker now acquired, the most well-funded private company in the market is Google Ventures-backed Machinima (which has suffered its share of setbacks), followed by YouTube marketing software startup Zefr, which raised a $30M financing round led by Institutional Venture Partners in February. The chart below highlights the notable growth in funding to YouTube MCN startups since the start of 2007. Of note, Machinima, Zefr and Fullscreen have already raised an additional $56M in the first three months of 2014. Expect a lot more activity and investment around the YouTube ecosystem in the coming months with the exit of Maker.
All of the underlying financing data on the YouTube MCN ecosystem is on the CB Insights Venture Capital Database. Sign up for free below.If you aren’t already a client, sign up for a free trial to learn more about our platform.