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Polycom Buys ViVu As Video Moves Beyond the Conference Room

ViVu, whose software enables high-definition video conferencing to be embedded into existing applications, is one of several companies helping business video calling move beyond the high-end room systems sold by Polycom and Cisco Systems Inc.

The Cupertino, Calif.-based company raised $3 million in Series A funding in 2009 from Inventus Capital, Draper Fisher Jurvetson and Quest Ventures. It recently added an undisclosed investment from Advanced Micro Devices Inc. and was nearing a close on its Series B when it decided to take Polycom’s offer, said Sudha Valluru, ViVu’s co-founder and chief executive.

Video conferencing has been on the product roadmap of several software companies for years and not yet offered, but ViVu was able to accomplish with less than 20 people what most companies couldn’t build with 200 engineers, said John Dougery, Managing Director of Inventus Capital, the company’s biggest institutional shareholder. His firm’s internal rate of return on the sale was in the triple digits, he said.

Polycom announced last month that moving its video conferencing capabilities to software is core to its strategy to grow that business. Its customers are looking for video conferencing services that can be delivered to a variety of places–like desktops, mobile devices, tablets and social networks–and moving more of its technology to software is the best way to make that happen, said Tom Carhart, Polycom’s vice president of business development.

ViVu has embedded its software in several other applications, such as Tibco Software Inc.’s social platform Tibbr and Microsoft Corp.’s instant messaging tool Office Communicator. It also is offered as a stand-alone video conferencing service that specializes in calls between more than two parties.

Several other start-ups are expanding video conferencing beyond immobile room systems. Vidyo Inc. scored a $22.5 million Series D round in September for its scalable video coding systems that are used send high-definition video calls over the Internet, and in June Blue Jeans Network Inc. raised $18 million in Series B funding for a cloud-based video conferencing service.

In addition to Dougery, Joel Yarmon of Draper Fisher Jurvetson sat on ViVu’s board.

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