Melbourne CDN startup wins $2.3 million


news Melbourne-based cloud content delivery network startup MetaCDN this week revealed it had completed one of the largest early stage investment rounds in an Australian technology startup over the past several years, winning $2.3 million in funding from investors including Starfish Ventures and the University of Melbourne Endowment fund.

The company leverages the infrastructure of cloud computing providers such as Amazon, Microsoft, Google and Edgecast to offer what it describes as “enterprise-class content delivery, video encoding and streaming services on an unmatched global scale”. Its website focuses on advertising services that allow website owners to “super-charge” their site, “dramatically improving load times and availability across the globe” and integrating with popular content management platforms such as Drupal, Joomla!, WordPress and Magento.

In a statement, the company positioned itself against “established vendors” in the CDN market such as Akamai, Level 3 and Limelight, stating that such companies locked customers into “costly and inflexible fixed contracts”. In comparison, MetaCDN chief executive Martin Ryan said the company’s ‘ease of use’ philosophy and ‘pay-as-you use’ pricing model promised instant deployment while easing the financial risk faced by online businesses of predicting and managing variation in traffic demand as they expand.

“In recent years, we’ve seen how cloud services can help business grow and scale and we’ve applied these principles to the CDN sector through our unique technology,” said Ryan.

“Ease of use and pay-as-you-use pricing lowers the hurdle for customers who can benefit from CDN services, and provides flexibility as their business grows. There is a large and rapidly growing market for online businesses that can benefit from CDN services but they’ve been ignored or penalised by locked-in contracts, excessive charges and variable performance. We are changing that,” he added.

Anthony Glenning, Investor Director at Starfish Ventures, said: “We see MetaCDN as a next generation CDN provider. This technology brings incredible value to an increasingly online world, and we expect MetaCDN to really shake up the market in the near future. Similar to the way [software as a service] and the cloud have revolutionised software applications, MetaCDN is helping businesses by bringing the advantages of instant scalability and no contracts to CDNs. Leveraging the cloud makes MetaCDN super nimble which means value added services, technology advancements and cost reductions can be delivered to customers in real time. That’s a terrific business model.”

The company was founded in 2011, based on research generated out of the University of Melbourne by, according to its website, its chief technology officer James Broberg, who had been developing the solution for the past four years. Ryan himself has a history in content delivery, having worked as chief executive for MIA, a company focused on mobile content delivery and as the general manager of Melbourne-based hosting company Webcentral. In addition, he has also served as the Asia-Pacific managing director of systems management company KACE, which is now part of Dell.

MetaCDN’s current pricing model advertised on its website sees customers presented with two standard pricing options, at $49 and $99 per month, which offer different tiers for CDN use, such as featuring a single active CDN network or multiple active CDNs, and different numbers of active points of presence located around the globe.

Firstly, let me say congratulations to MetaCDN for its successful funding round. $2.3 million is a stack of money for an Australian IT startup to raise, particularly from Australian investors. Those investors must have seen something in MetaCDN, and I wish the company the best of luck in its endeavours.

Because, in my opinion, it’s really going to need it.

The content delivery network space for online material is a space which I know more than the average person about. I have personally founded a medium-sized successful website (Delimiter itself) which can spike often to quite sizable traffic volumes, and been involved in the core running of several others. And given this, it’s really hard for me to see what kind of customers MetaCDN is currently targeting with its offering, and how it’s actually going to make money from them.

There are fundamentally two different types of websites online; big ones and small ones. The small ones get, say, less than 50,000 page impressions a month and can be almost universally successfully run from commodity infrastructure. A single virtualised server instance running on cheap web hosting is normally good enough.

When you get larger than this – particularly if you have dynamic content – it gets harder. When you get to several hundred thousand page impressions a month, commodity infrastructure doesn’t cut it any more, and you’ll need to start spending quite a bit of money on web hosting. Delimiter’s own web hosting bill, for example, has doubled basically every six months since it was founded two and a half years ago, and is now not an insignificant figure. When you get to this point, you really need to start working with a quality hosting company, and often on a custom solution, in order to keep your site operational in front of the traffic flood.

Where do MetaCDN’s current services sit in this equation? Nowhere, to my mind. Those with web sites with only a small amount of traffic don’t really need and probably wouldn’t like to spend $50 or $100 more per month to sign up to a global CDN network of the kind that MetaCDN offers. And sites which are larger than this will usually already be spending a lot more money on web hosting, if they need to keep their site up all day, every day at a decent latency, and expect reliable telephone-based support from their hosting company. They are already likely to have superior infrastructure in place, and either don’t need a CDN if they don’t operate globally, or if they do need to operate globally, will be paying a lot more money for a premium-class solution. Personally, even with Delimiter, I would never look at a $50 or $99 package to add better content distribution to the site. I would find it very hard to believe that any company could offer a solution for that amount which would substantially improve what I already have.

I don’t know anything, really, about the strength of MetaCDN’s technology, although I am curious as to the development path it took to get to this point. Four years of development effort, in the fast-moving cloud computing space, is an age. Virtually everything in cloud computing land has changed dramatically in that time. However, that’s not what I would criticise the company about. I feel like it just hasn’t quite understood the web hosting market and the pricing dynamics in it well-enough. It’s positioning itself as a commodity player; but commodity sites don’t need CDNs, and large web sites which do need CDNs won’t look at commodity suppliers.

Perhaps MetaCDN will prove me wrong; I certainly hope so. I’d love to see it go on to do great things and become a major company. In any case, let me once again congratulate the company on its funding round this week. This is yet another indication of how mature the funding scene is in Australia for IT startups.

Image credit: Max Romersa, royalty free


Comments are closed.