Mobile Video In Focus For Users And Investors: Animoto Picks Up $25 Million

It’s well known that video services account for some of the most intensive use of mobile data networks — and while some of that is down to how large video files can be, it is also because mobile video happens to be very popular, too. Now one of the startups working in that space, Animoto, is showing that this is driving investors to the medium as well. Today it’s announcing that it is picking up $25 million, in what looks to be its first injection of cash in nearly two years.

This round was led by Spectrum Equity Investors and also had participation from existing investors Madrona Venture Group and, according to a blog post from Brad Jefferson, the founder and CEO of the company.

Animoto has built a business out of offering users the ability to create slideshows out of videos and still pictures taken on mobile and other digital devices.

The basic service, which is available as an iPhone app, is free, and users pay either a one-off fee, or a subscription, to access extra templates or upload longer videos. It can also be accessed via third parties: Animoto has API deals in place with companies such as Kodak Gallery, American Greetings’ Webshots and Aviary.

Animoto says it now has three million users that upload 750,000 slide shows every month.

The company has not been specific about how it intends to use the new funds, but you can expect development on to more mobile platforms and more integration to use the service across a range of consumer electronics media devices:

“The financing means we now have the capital to ensure we can deliver on the vision we set out to achieve nearly five years ago,” writes Jefferson. “From a product perspective, we’re very focused on making videos even easier to create and even more amazing to watch. In terms of new product plans, we are closed-lipped for now but, as a hint, we feel that Animoto is uniquely suited to capitalize on the imminent convergence of photos, videos, mobile and the digital living room.”

This is a big vote of confidence in Animoto — and also a sign of how much interest in mobile video has grown in the last couple of years with the rise of smartphones.

Animoto’s last round, of $4.4 million, was in June 2009, and led by Madrona Venture Group with participation from Amazon (NSDQ: AMZN). Amazon had also made an unspecified investment in the company in 2008: given that today’s announcement details that the company had $5 million invested in it before now, that would mean Amazon’s investment was somewhere around $600,000.

On the back of the funding, Spectrum partner Ben Spero joins the Animoto board of directors. He’s also on the boards of Spectrum portfolio companies, SurveyMonkey and SeamlessWeb.