DailyMotion raises €17 million, with French government help

The French-born version of YouTube, DailyMotion – which has now grown into a global site with 60 million users – has officially confirmed its latest fundraising of €17 million, which was early reported as €15 million earlier this month. The new information is that there was an undisclosed €7.5 million investor in the round which turns out to be a French state-backed investment fund. According to Atlas VC Fred Destin on his blog today, Atlas Venture has participated “above pro-rata in this round and grows ownership”.

DailyMotion continues to defy the destruction of many video players like Veoh in the wake of YouTube’s onslaught, and is now heading through to over 60 million uniques users.

Destin says competition form tradition media plays and YouTube has been “challenging” (an understatement) and he says Atlas has taken flack for it’s backing of the company.

What’s the startegy here? To get to a size where Google/YouTube can’t ignore it in certain markets like France and has to buy it? This seems wishful.

UPDATE: According to LeFigaro, France’s French Strategic Investment Fund has put in €7.5 million and previous investors Advent Venture Partners, AFG Private Equity and Partech International have also participated. The site is serving 1 billion videos viewed a month and is “on the threshold of profitability”.

Our France-based contributor Cedric Giorgi writes:

FSI stands for “Fonds Strategique d’investissement” and is an organism of the French State (49% of shares) intended to invest in strategic companies. It’s the first time the FSI has invested in the digital space. The French State was already represented within the managing Comittee (Info Numerama in French).

The first reactions online are quite sceptical as people fear the French state will try to control and filter what will be made available on Dailymotion.