Samsung Electronics buys VC-backed Boxee

Boxee's DVR set-top box stores content in the cloud, allowing viewers to watch recordings anywhere without space constraints. Most DVRs allow for a limited number of recordings before the user has to delete content to make room for more.

Established in 2007, Boxee has raised $28.5 million from Softbank NY, Spark Capital and Union Square Ventures Capital among others. The business started as an online media hub before it evolved into a set-top box and cloud DVR service.

According to engadget, around 40 staff from Boxee - including its founder Avner Ronen - are to be kept on post-acquisition.

Meanwhile, Boxee announced its cloud DVR functionality would be discontinued on July 10. "You will not have access to your existing recordings after that date," it said in a statement to customers. "We realize many of you loved the service, and we're sorry it won't be available moving forward,"

Samsung, the world's biggest TV manufacturer, says it will use the acquisition to improve services across its own connected devices. The firm has recently been expanding features on its internet-connected TV sets such as video communication and apps that directly tap Netflix and other streaming video content.

Whether Boxee will continue to sell set-top boxes under its own name is unclear but the deal appears to conform to the acquire-hire strategy commonly found in the technology sector. Large strategic investors are known for buying start-ups to get access to key engineering talent and intellectual property, and close their targets post-acquisition.

Acqui-hires typically arise early in the life cycle of start-ups, often when the target company has failed to deliver on early promises and faces difficulty raising additional capital.

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