Video rental company Netflix agreed to sell $200 million of convertible debt to long-time backer Technology Crossover Ventures to raise new capital.

Netflix has lost about two-thirds of its market value since the company's shares touched a high of almost $300 in July.

Los Gatos, Calif.-based Netflix, which had $159.2 million in cash and cash equivalents at the end of September, has struggled to renegotiate video content deals. It has also lost subscribers and warned of a first-quarter loss.

When Netflix Chief Executive Reed Hastings said hey I'm going to double content spend in 2012, we couldn't see how it could happen. It was blowing up our model ... But if they really had to go out and double content spend, he had to do something to get the cash, UBS analyst Brian Fitzgerald told Reuters.

It's necessary for the company because they have to get some content ahead of the launches in UK and Ireland.

As part of the agreement, TCV will receive zero-coupon notes, due in 2018, that convert to Netflix common stock at a price around $85.80 a share.

Fitzgerald said the valuation of the private placement was indicative of the risk attached to the company's business model.

The problem with the stock is you have other deep pocketed technology companies like Amazon, Google, Apple and even the incumbent MSOs and companies like HBO Go, and they are all starting to get their content out just as ubiquitously as Netflix, he said.

I think that the riskiness to the model is baked into that $85 share price.

The deal requires Netflix to raise at least $200 million by selling common stock to other, unaffiliated investors, according to a filing with the U.S. Securities and Exchange Commission.

Shares of Netflix fell 0.6 percent to $74 in extended trade on Monday.

TCV, a leading venture capital firm, has been an investor in Netflix for many years. TCV co-founder Jay Hoag is on Netflix's board.

TCV also has investments in Groupon, Facebook and Electronic Arts.