Waterloo-based  Aterlo Networks Inc. has raised $1 million in venture capital financing  to help the company expand sales of its flagship product, Nightshift.

Nightshift allows households with weak internet connections to download high-volume content like videos during off-peak hours and then lets family members watch them at their convenience.

MaRS Investment Accelerator Fund, a seed-stage fund managed by the Toronto-based innovation hub MaRS Discovery District, led the round. BDC Capital and Sandvine Inc. also invested.  

“Aterlo Networks has the opportunity to offer millions of people with small data caps and lower bandwidth in the U.S. and Canada a solution to streaming high definition video,” said Dan Mathers from MaRS IAF in a statement. “Aterlo’s product solves a problems faced by millions of people in both urban and rural environments, which means that there is a high potential for the company to build a scalable business.”

There are about 30 million high-speed internet subscribers in the U.S. who receive less than the 5 Mbps required to stream a single video in high definition, said the company. Aterlo has been providing their solution to these people for a year and half. More than 200 satellite internet dealers are offering Nightshift to their customers.

“Internet subscribers not being able to stream high definition video is a much bigger problem than most people realize,” said Gerrit Nagelhout, CEO of Aterlo Networks. “Their bandwidth is almost high enough to stream it, but it just misses the mark. Streaming just an hour of HD video a day uses 3GB, so many households very quickly collide with their data caps. With 4K video content coming and the desire for several video active video streams, the problem will only get worse.”

Aterlo has incubated in the Google for Entrepreneurs and Communitech’s Rev programs, and is now in residency at the Accelerator Centre as it grows its team.

“NightShift doesn’t interfere with the DRM set in place by the streaming video provider. A valid subscription and active connection to the provider is still required,” said Dan Siemon, VP production management of Aterlo. “We’ve worked very hard to build a solution that is friendly to video streaming providers and doesn’t break DRM or enable copyright violation.”