Ooyala has raised $35 million in new capital to aggressively standardize digital video experiences provided by multi-service operators and TV programmers worldwide on the Ooyala video streaming, monetization and discovery platform. Telstra Applications and Ventures Group, a subsidiary of Australia’s largest telecommunications and information services company Telstra, led the Series E round, with prior investors Sierra Ventures, Rembrandt Venture Partners and CID Group participating in addition to other strategic investors.

In addition to leading the investment round, Telstra and Ooyala are working on a commercial agreement that, once finalized, will mean Telstra will also become a major Ooyala customer and reseller, deploying Ooyala software, analytics and service offerings throughout Australia, where they will work with content owners to transition from traditional video delivery to IP-based distribution.

Telstra will join Ooyala’s network of major reseller partners that includes Telefonica, Yahoo! Japan, and others. Telstra is Australia’s leading telecommunications and information services company with presence in 15 countries including China. It operates Australia’s largest fully integrated IP network and its largest and fastest wireless broadband network, and is one of the country’s 20 largest companies by market capitalization. Its cable and media assets include multi-device IPTV offerings, Big Pond Broadband, Big Pond Movies, a 50% ownership in Foxtel and other assets.

Telstra’s current multi-device IPTV offerings will be enhanced through the integration of Ooyala’s online video technology and analytics. Combining Telstra and Ooyala provides the opportunity to take advantage of the strengths of both organizations to better serve the Australian market. Telstra will work closely with Ooyala on a smooth transition of services to allow its customers to reap the benefits of the new model.

Ooyala will use the new capital to fuel its market momentum with MSO’s and TV programmers. The company will add scale particularly to its operations outside of the U.S., building on its existing footprint in Europe, Asia, Australia and Latin America. Over half of Ooyala’s business is outside the U.S. where large customer wins have helped make it the fastest-growing company in online video, quadrupling revenues since its last funding round in September 2010.