Amazon to Acquire Elemental Technologies to Boost its Cloud Infrastructure

Amazon has announced its decision to acquire Elemental Technologies, a back-end mobile video service for $500 million in cash.

The deal was organized by Amazon Web Services unit, which will incorporate Elemental’s technology into its cloud infrastructure services mobile video offering.

Elemental, was founded nine years ago in Portland. It makes makes high-speed video encoding and transcoding software to enable multiscreen content delivery across different screens and devices. ABC, BBC, Comcast, Ericsson, and ESPN are among its many clients.

Elemental has raised roughly $44 million from investors over the years, including venture firms General Catalyst Partners, Voyager Capital, Steamboat Ventures, and Norwest Venture Partners. Others of its investors include the Australian telco Telstra, the European pay TV giant Sky, and the angel investor groups Oregon Angel Fund and Alliance of Angels.

According to CEO Sam Blackman, Elemental, which will retain its brand even after the deal, which is expected to close in the fourth quarter of this year.

At $500 million, Elemental would represent one of Amazon’s five biggest acquisitions to date. The others include Zappos, acquired in 2009 for $1.2 billion; Twitch, acquired last year for $970 million; Kiva Systems, acquired in 2012 for $775 million; and Quidsi, acquired for $545 million in 2010, reports Techcrunch.

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