The previous blog in the series explained how Softbank had invested $100 million in a series C financing round to allow Banjo to expand its offering. Banjo analyses breaking news and events in real time, and is already used by prime news organisations such as NBC, the BBC and Fox to deliver live social content to their television networks. In this article, the investment mechanism will be examined in more detail.
Softbank is a Japanese telecommunications and media giant, making the investment in Banjo a good fit with its business model. Previously, Banjo has secured a $5 million series A investment in 2010, followed by a $16 million series B. A series A round is associated with a company’s first attempt at attracting venture capital investment, and the name itself refers to the class of stock which is being offered for sale at this juncture.
Series A preferred stock is offered during the seed or early stage round, which is usually carried out during the critical stage in a new company’s funding. Series B is the second round of financing which usually takes place once the company has reached certain landmarks in its development. As the company is more advanced by this stage, the series B investor will pay more than the series A. The series C round occurs when the company is looking to expand further, having already proved its success in the market and being able to demonstrate that it has the potential to reach a larger market.
The C and D rounds of financing conclude the early financing cycle, and at this point a venture capitalist may be looking to exit. It is usual for companies to be sold on or made publicly available once the early funding cycle has been completed.
The next and final Mukesh Valabhji blog post in this series reveals what the future holds for Banjo now that it has its funding in place.