By ADAM GIFFORD
America's Cup internet broadcaster Virtual Spectator has received a $5 million capital injection to develop its ground-breaking animation technology.
The new money comes from listed company IT Capital and American venture capital firm Snider Capital, and is in addition to the $1.5 million pumped in by chairman Lindsay Fergusson last month.
Mr Fergusson's stake in Virtual Spectator is now reduced from 50 per cent to 17 per cent.
"I'm happy to have 17 per cent of something that is going to be very big rather than 50 per cent of something small," he said.
Dunedin-based Animation Research, which invented the Virtual Spectator technology and developed it in partnership with Auckland multimedia design firm Terabyte, also agreed to "park" its other activities and commit its staff and intellectual property in digital sports to Virtual Spectator in exchange for 27 per cent of the shares.
Managing director Ian Taylor, who with Terabyte founder Craig Meek becomes an executive director of Virtual Spectator, said that in the past decade Animation Research had spent $5.5 million on the project.
The deal means Pennsylvania-based Snider Capital puts in $2.5 million for a 15 per cent stake and president Jay Snider becomes a member of the Virtual Spectator board.
IT Capital puts in a further $2.5 million, boosting its shareholding to 19 per cent, and its managing director, Keith Phillips, joins the board.
Terabyte founder Craig Meek has 7 per cent, and the remaining 900,000 shares, or 15 per cent, is reserved for present and future employees.
Mr Snider said a further round of private capital raising was likely in six to nine months.
"It would have to be in the neighbourhood of $US20 million."
A public float might be considered after that.
He said that when Snider Capital invested $US2 million last year for 6 per cent of IT Capital, it also committed $US3 million for coinvestment.
"Virtual Spector is a perfect fit for where we want to go, so we want to increase our bet.
"There is a tremendous amount of management and technology talent here [in New Zealand]. That was the reason for our initial investment in IT Capital.
"We feel very comfortable with our investment in Virtual Spectator, knowing the development of the business will continue here."
He said Snider Capital was investing in sports, leisure and entertainment ventures around the world.
"The entire sports world is talking right now about the introduction of new technologies which will enable the enjoyment of sports over the internet.
"We believe Virtual Spectator is the leading technology in the world. It is the first to produce a live animated sporting event while others are simply talking about it."
The new capital will be used for research and development, including exploring ways to capture the data needed to broadcast other sports.
Motor racing, golf, horse racing, cycling, athletics, swimming and gliding are listed as possibilities.
The company will set up a marketing office in the United States as soon as possible.
Internet animator gets $5m capital injection
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