Zixi brings in $4 million in first venture round, to market new technology for high-def video delivery

By Scott Kirsner, Globe Columnist

It never hurts to have a technology demo that makes the status quo look totally unacceptable... and that's just what I saw last week at the Waltham offices of Zixi, a start-up founded in 2006 that is announcing its first round of venture funding today.

Zixi is selling software to broadcasters and manufacturers of television set-top boxes that delivers video more reliably — especially high-definition video. The Internet, observes Zixi CEO Israel Drori (pictured at right), wasn't designed to deliver video. That's one reason we all spend so much time waiting while video "buffers," or watching pixilated movies because Netflix has determined that our connection isn't fast enough.The new transmission protocol and server-to-client synchronization system Zixi has developed makes more efficient use of the available bandwidth, Drori says.

Zixi's approach, he explains, delivers video without getting tripped up if a chunk of data here or there gets lost or delayed (which is inevitable on the Net.) And the demo is pretty dazzling. The company has mounted two side-by-side flat-screen TVs on the wall of a conference room; the left one shows video delivered normally over the Internet, and the right one shows it using Zixi's software. Whether watching pre-recorded content, or a live stream of CNN, the screen on the right always started playing three or four seconds sooner than the non-Zixi screen, and it was never subject to freezing or stuttering.

Key to Zixi's technology is a way to use more of the available bandwidth for video delivery, and less for acknowledging that certain chunks (or packets) of video data were received, or recovering packets that got lost or waylaid.

Drori says that he and chief technologist Uri Avni bootstrapped the company for the first five years. "We knew that longer-form video was coming, that quality would be important since people were buying these big flat-screens, and that TVs and set-top boxes would have Internet connections," Drori says.

The funding round took place in late 2010, just before New Year's. It includes Boston-based Schooner Capital, as well as individuals like Sidney Topol, former CEO of the set-top box maker Scientific Atlanta, and Maurice Schonfeld, a former top exec at CNN and the Food Network.

"At the first meeting, I was extremely skeptical," says Ted Henderson, managing director at Schooner. "I talked to every one of their customers. But at the end of the process, we said, 'This is off the normal radar screen,' but we like things like that. We also felt that the timing of what Zixi is trying to do was finally right."

The company now has nine employees in Waltham, and another eight in Tel Aviv, Israel. Since the funding, Zixi has hired sales and marketing executives from Samsung and Netgear. Now, the company's focus is on selling its technology to media companies and set-top box manufacturers. They're marketing it both as a way to deliver video among a network of partners (for instance, a cable channel getting its content to a cable system in Australia, without paying for satellite delivery), and also directly to the consumer.

Zixi's customers include Thomson Reuters and 20th Century Fox, and its software was integrated into a Netgear set-top box last fall.