French on-line DVD rental leader, glowria, has purchased the third largest on-line DVD rental company in Germany, DiViDi Entertainment GmbH. The acquisition makes glowria the Number 1 market player in continental Europe.

glowria, which features the largest DVD rental catalogue in France with over 10,000 titles, is already the number one on-line DVD rental company in France. The acquisition allows DiViDi to benefit from glowria’s knowledge and experience in IT, logistics, catalogue and rights acquisition, and marketing, as well as glowria’s operational expertise and access to capital, providing superior service to German customers.

Long-time glowria investor SPEF Ventures was joined in this third round by new investor Credit Agricole Private Equity (CAPE). Each invested $2.4 million, bringing glowria’s total funding to $15 million. The new capital will also speed glowria’s plans to roll out Video-on-Demand in France and Germany later this year.

Founded in 2003 in Munich, DiViDi is the Number 3 player in the German market, has a catalogue of 7,000 titles. It has grown organically and through acquisition. In 2005, DiViDi acquired DVD-Leihen, a small DVD rental company.

DiViDi is the only German service to offer, like glowria and US giant Netflix, unlimited, all-fees-included subscription DVD rental plans. DiViDi has a strong partnership base, including ADAC, the German Automobile Club, with 15 million members, and ProSiebenSat1, a key German satellite operator.

Although specifics of the deal were not disclosed, Glow Entertainment Group SA acquired 100% of the shares of DiViDi Entertainment GmbH. Frederic Baschet, Vice President of International Acquisitions, glowria, will serve as interim country manager until a permanent local country manager is put in place.

“This latest round of funding allows us to strengthen our position as a European leader in online digital video entertainment, be it online DVD rental or VoD,” explained Mihai Crasneanu, founder and CEO of glowria. “The German market is the most important in Continental Europe, and we have entered it with a strong player that shares the same values as glowria.”

Story filed 03.04.06