Boxee, the NYC-based startup that is making software for watching online video on your TV set, just closed a big new round of financing: $16.5 million, led by new investors Pitango (Tel Aviv-based) and Softbank. Previous investors General Catalyst, Spark Capital, and Union Square Ventures contributed to the round.
Boxee says it will use the money to further develop its product and establish more partnerships for content and hardware gadgets.
Boxee is in an interesting spot. It is playing in a promising market — the intersection of TV and the Internet — but it hasn’t become a mainstream service so far, and doesn’t really stand out from the pack.
Meanwhile, it faces a slew of very rich and somewhat motivated competitors, such as Apple, Google, Microsoft, and — of course — the cable industry.
Boxee’s likeliest exit has always been to help one of the existing TV giants, like Cisco or Comcast, design the future of the TV interface. But the more money it raises, the more it’s going to need to fetch to please its investors. It’s an important year to start getting some more traction.