Sling Media, makers of the well-regarded Slingbox, was searching for a third round of financing three months ago.
What the tech startup got instead was a $380 million buyout from EchoStar Communications – and a key role in the satellite-television company’s possible spinoff.
The Slingbox grabs live or stored video from a television, digital video recorder or cable set-top box and allows users to watch that content on a computer or laptop via a high-speed Internet connection.
The box has received rave reviews since launching in 2005, garnering a 7.7 out of 10 rating from tech website . About 100,000 boxes were sold during the first six months of availability, according to Sling board member Ryan McIntyre.
EchoStar could incorporate Sling’s technology into its set-top boxes, giving the company’s satellite-TV subscribers the ability to watch recorded content or local TV shows while on the road.
EchoStar could also license the technology to competitors like DirecTV, Comcast and Time Warner Cable – if it had a separate wholesale business.
And so, just hours after disclosing the proposed acquisition of Sling late Monday, Douglas County-based EchoStar announced early Tuesday that the company may separate its consumer and wholesale businesses.
The consumer business would include EchoStar’s Dish Network and its 13.6 million subscribers. The wholesale segment would include Foster City, Calif.-based Sling, Echo Star’s set-top box business and other assets.
“After a long series of conversations, it became clear to (Sling) that becoming part of EchoStar would afford Sling resources, distribution and market muscle throughout the media landscape that they simply wouldn’t have as an independent entity,” McIntyre wrote on his blog Tuesday.
McIntyre’s Boulder-based Mobius Venture Capital led Sling’s first round of financing of $10.5 million. Mobius stands to make a “very nice return” on the investment, McIntyre said.
Before pursuing the buyout, EchoStar led Sling’s second round of financing of $47 million last year.
Sling employs about 200 people. There are no plans to move the headquarters or workforce, Sling spokesman Rich Buchanan said.
Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.
