Red Swoosh
Peer-to-peer content delivery company that develops client-side technology to support, manage and distribute media files.
| Date | Investors | Amount | Round |
|---|---|---|---|
| - | investor investor | €0.0 | round |
| N/A | €0.0 | round | |
$15.0m Valuation: $15.0m | Acquisition | ||
| Total Funding | 000k | ||
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Red Swoosh, founded in 2001 by Travis Kalanick and Michael Todd, operated in the peer-to-peer (P2P) content delivery market. Kalanick, who would later co-found Uber, had previously been involved with Scour, a P2P file-sharing service that faced a massive lawsuit leading to bankruptcy. This experience influenced the creation of Red Swoosh, which Kalanick termed his "revenge business" against the entities that sued Scour. The company's journey began during a challenging economic climate following the dot-com bubble, which created difficulties in securing early-stage funding. Internal tensions and financial pressures, including the use of payroll tax withholdings for operations, marked its early years and led to the departure of co-founder Michael Todd.
The firm's core business was providing technology to media companies and other websites to distribute large files, such as videos and software, more efficiently. Instead of relying solely on centralized servers, Red Swoosh's technology utilized a P2P network, similar to BitTorrent, where users downloading a file would simultaneously source pieces of it from other users who already had it. This model was designed to significantly reduce bandwidth costs for its clients while improving download and streaming speeds for end-users by as much as 50%. The service was implemented through a browser extension that end-users would install, which then managed the file transfers in the background across the network. Red Swoosh also offered a software development kit (SDK) to encourage third-party development on its platform.
After initial struggles, the company secured a critical investment from investor Mark Cuban in 2005. This recapitalization allowed the company to continue operations and further develop its technology. Ultimately, the venture culminated in its acquisition by Akamai Technologies, a major content delivery network, on April 12, 2007. The deal was an all-stock transaction valued at approximately $19 million. For Akamai, the acquisition was a strategic technology purchase, allowing it to integrate P2P distribution capabilities into its existing server network and counter a growing competitive threat from P2P services.
Keywords: peer-to-peer, content delivery network, file sharing, bandwidth optimization, video streaming, media distribution, Travis Kalanick, Akamai, Mark Cuban, P2P