The investment increases Telstra's ownership in Ooyala from 23% (fully diluted) to 98% and is in addition to the $61 million previously invested in Ooyala over the past two years. The transaction is subject to customary closing conditions and is expected to be completed in the next 60 days.
Ooyala will become a subsidiary of Telstra, and will operate as an independent business under the leadership of its existing management team led by CEO Jay Fulcher. The company will retain the Ooyala brand and will continue to be headquartered in Silicon Valley.
With expertise in the digital media space, it is hoped that Telstra can provide the necessary and ongoing investments and business relationships to build on Ooyala's work in personalised video.
Fulcher said: "With this investment, Ooyala is poised to extend our leadership in the rapidly expanding market for personalised cloud TV and video technology.
"With this news we combine the backing of one of the strongest telecommunications companies in the world with the intensity and agility of an independent Silicon Valley company. This combination accelerates our growth and pace of innovation, while we remain laser-focused on helping media companies everywhere win in an industry undergoing massive transformation."
This is the first investment for Global Applications and Platforms (GAP). GAP's strategy is to create long-term global growth in markets that are adjacent to Telstra's core business, where software disrupts traditional business models.
Telstra CEO, David Thodey, said: "This provides an opportunity for Telstra and Ooyala to establish a consolidated leading global company to deliver platforms and services on which the next generation of TV and video will be built.
"Telstra's global customer relationships, our established presence in Asia and proven integration capabilities, combined with our expertise in online video and investment in Foxtel provide us a unique opportunity to succeed in this growth market."