Less than seven months after it snatched $9.5 million, Gigya, a startup that distributes widgets across a network that reaches Facebook and MySpace, raised $11 million in a third round of funding led by DAG Ventures.
The new investment comes at a time when analysts fear that VC funding in the Valley will slow down because of the decline of initial public offerings and mergers and acquisitions (see related story).
According to Dow Jones VentureSource, venture capital exits through initial public offerings and acquisitions dropped 66 percent in the third quarter to $4.6 billion.
But these gloomy predictions are of little concern to the PaloAlto, California-based startup that didn’t even seek a third round of investment.
“Investors came to us in a pre-emptive round. We were not seeking money since we were already given the valuation that we desired.” said Liza Hausman, Gigya’s VP of marketing, emphasizing that the company has a slow cash burn rate and still has money from the second round.
“The money will be spent in part towards hiring more sales people,” said Ms. Hausman. The startup, which counts 40 employees and is generating revenue, is not hiring rigt now but hopes to add 15 sales people in 2009.
Gigya is not feeling the heat of a crashing economy and embraced the widget business early on as both a distributor and marketer of millions of widgets.
Widgets are these various little boxes that display information and invite users to act in different ways, like Slide's Fun Wall or Super Fun Wall found on Facebook.
According to comScore, Gigya is the world’s second largest content-sharing platform--after Slide-- reaching more than 158 million unique users monthly. Gigya is No.1 on the U.S. market, explaining DAG Ventures’ eagerness to join previous investors Mayfield Fund, Benchmark Capital, and First Round Capital.
Gigya claims it installs each month 15 million widgets on 50 different web sites and tracks 6 billion installed widget impressions each month.
The startup, which makes a business helping widget developers make money by boosting their tracking and distribution, is also grabbing revenue through its social advertising network, for which the startup creates widget campaigns.