Atmosphere Raises $100M, Surpasses 19K Venues and 20M Viewers

A New Funding Round for Atmosphere, the Ad-Supported Video Provider

Companies such as Muzak have successfully established businesses by curating licensed audio content for commercial environments – famously known as “elevator music.” Now, a company aiming to replicate this success within the video realm has secured substantial funding as its business demonstrates continued strong performance, even amidst the challenges presented by the COVID-19 pandemic.

Atmosphere, a provider of ad-supported, free licensed video channels – frequently broadcast without audio – for public locations like bars, restaurants, and medical offices, has raised $100 million. This funding comprises $80 million in Series C financing and an additional $20 million in debt.

Investment Details and Valuation

Sageview Capital spearheaded this investment round, with participation from Valor Equity Partners and S3 Ventures. Valor Equity Partners, previously invested in companies like SpaceX and Gopuff, as well as media tech firms such as Reddit and Cloud9, led Atmosphere’s $25 million Series B round in April 2021. Bridge Bank is supplying the $20 million debt facility.

While Atmosphere has not disclosed its precise valuation, CEO and co-founder Leo Resig indicates the company is “not quite a unicorn, but we are close,” suggesting a valuation in the high hundreds of millions of dollars.

This represents significant growth for Atmosphere, which originated as a spin-off from Chive Media in 2019. The company had previously been valued at $275 million in April 2021, according to PitchBook data, and has now raised a total of $140 million.

Growth and Content Strategy

Atmosphere has experienced considerable growth despite potentially difficult circumstances. Over the past year, its customer base has more than doubled to 19,000 venues, up from 9,000 a year prior.

Currently, the platform streams approximately 250,000 hours of content daily to around 20 million unique viewers. Resig reports that advertisements on the platform generate 215,000 impressions, a figure comparable to traditional television ratings.

Atmosphere’s content strategy involves sourcing and curating videos from both established brands, such as Red Bull, and lesser-known creators, alongside original content, including a new news format. Crucially, nearly all content is designed to be viewed without sound and features on-screen captions.

“One hundred percent of the content we stream is audio optional,” Resig explained. He noted that the majority of venues already broadcast television with the sound muted, and Atmosphere aims to provide engaging video content suitable for this viewing experience.

Addressing a Market Gap

Atmosphere’s opportunity lies in addressing a gap in the market: content creators seek new audiences, and the Atmosphere format offers a viable avenue for reaching them. The company is currently in discussions with professional sports organizations and other entities to develop dedicated channels on its platform.

The company recognizes that commercial use of video streaming necessitates specific licensing, making paid television in these environments more expensive than residential subscriptions. Atmosphere offers a cost-effective alternative – a free, ad-supported service – bundled with hardware like Apple TV (though businesses can utilize existing equipment).

Expanding Beyond Bars and Restaurants

Atmosphere initially focused on bars and restaurants, but the COVID-19 pandemic prompted a diversification strategy. The company expanded its reach to include doctors’ offices, gyms, and other public spaces where individuals may experience wait times or require background entertainment.

Today, approximately 60% of Atmosphere’s customers remain bars and restaurants, while the remaining 40% represent a diverse range of other venues. Current clients include Meineke Car Care, Burger King, and Texas Roadhouse.

Investor Confidence and Future Outlook

“We were impressed with Atmosphere’s unique strategy for connecting advertisers with hyper-focused markets,” stated Dean Nelson of Sageview. “We believe their capabilities will be well-received among advertisers and businesses that adopt the service. Given the company’s proven business model and strong growth, we’re excited to partner alongside Atmosphere at a stage when scaling its operation is most critical.”

Atmosphere is not alone in this space; Mood Media, formerly Muzak, also offers video solutions. However, Atmosphere differentiates itself through its ease of integration and its focus on profitability for all stakeholders.

While Atmosphere has yet to achieve profitability, co-founder Leo Resig anticipates that the new funding and continued scaling will lead to positive financial results.