An investment fund controlled by entrepreneur Simon Baker has become a shareholder in online film rental house Quickflix, after the business underwent a private share placement to raise $750,000.
The move comes after WIN Corp, at the direction of Australian media mogul Bruce Gordon, increased its shares in Quickflix last month after swapping part of a $1 million convertible note into shares.
Baker, previously chief executive of the REA Group which operates realestate.com.au, says the investment was based on an admiration for the digital distribution model.
“We invested for a number of reasons. Firstly, it’s a combination of the offline/online model and we very much like online business. Secondly, the business is placing itself rightly ahead of the move from DVDs to digitally-delivered video. I think these guys will be well positioned in that eventual transition.”
Baker says the success of NetFlix in the US is an example of how big the market could become, and that the firm wants to help Quickflix reach a similar level of success.
“I’ve been impressed by the management and I think at the end of the day they’ve got the idea of what they want to do and we think they can do it. From both a financial perspective and a skills perspective, we want to help.”
But Baker says the company doesn’t want to change its business too much, it only wants to help Quickflix “execute what they are doing better”.
“I think they will certainly play a strong role in the future of content delivery, what they have done is capture an audience. There’s really only themselves and Telstra operating in this market. I’m always a big fan of the small, nimble, innovative business taking on a more traditional company and I think they’re in a good position.”
Quickflix said its new funding will help the business increase market activity, and that it “is delighted to welcome our new shareholders to the register”.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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