Internet, Finance

Net Startups Nab Funding


If financing announced Monday is any indicator, venture capitalists are still paying close attention to Internet startups, with bets on a jobs site, an e-commerce helper, and a social network as the latest examples.

All involve early-stage funding rounds of about $6 million for U.S. companies outside of Silicon Valley, and the startups, venture capitalists, and strategic investors involved aren’t particularly high profile. But it does indicate this second wave of excitement about consumer Internet startups could be reaching the pile-on stage.

Even venture capitalists are starting to say that things feel bubbly. “I do think a minor bubble has emerged due to the high level of venture capital and the high level of interest,” Matrix Partners general partner Nick Beim said Friday.

HotGigs

HotGigs has received a $5.3-million first round of financing from Updata Partners.

The Minneapolis-based company, formed in 2003, runs a “staffing exchange” that, unlike most jobs sites, lets companies advertise to candidates for free. It requires staffing firms and independent contractors to pay to get access to job listings.

HotGigs adds a layer of social networking for the job seekers involved, allowing users to build out profiles and connections. It follows a portfolio company of Mr. Beim’s called TheLadders, which does the same thing for $100K-plus salaried positions.

“For companies, it’s a real pain in the butt [to advertise jobs],” HotGigs CEO Doug Berg said on Friday. “They get an avalanche of responses back, mostly not good.”

HotGigs also provides on-demand software. A contract management system is currently available and a customer relationship management system for staffing firms is set to launch at the end of the month.

Updata had previously invested in CareerBuilder and through its investment bank arm been involved in online jobs-related mergers and acquisitions. Mr. Berg had led Techies.com, a tech-oriented job board that raised about $100 million in venture capital and eventually shut down in 2001.

UnWired Buyer

Austin, Texas-based UnWired Buyer announced Monday it secured a $6.1-million second round of financing from Gefinor Ventures, Access Texas Fund I, Aegis Texas Venture Fund, DFJ Mercury, and others. That puts its total funding at $8.8 million.

The company offers a free product that allows people to engage in the frenzied last minutes of eBay auctions via mobile phones. The system was also recently made available through a web browser.

eBay

UnWired Buyer’s greatest success has been signing eBay as a partner, with a co-branded version of its phone alert system set to be released by eBay this week (see “eBay 2.0” in the June 26 Red Herring Internet Report). It gets affiliate fees from eBay.

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The idea is to “bring non-addressable users back to the table,” UnWired Buyer founder Eric Smith said.

UnWired Buyer is examining businesses that are not entirely dependent on eBay.

Mr. Smith said the company would use its funding to build its business and explore other opportunities that hinge on the “marriage of scarcity and time sensitivity” and “getting perishable inventory to market to the widest possible group of users.” That might include concert and event tickets as well as travel.

Multiply

Also Monday, social-networking company Multiply said it raised a $6-million first round from Transcosmos Investments, a subsidiary of the Japanese marketing company Transcosmos, as well as the company’s founders.

Boca Raton, Florida-based Multiply operates a closed social network, focused on communication and sharing with friends and family. It is ad-supported, though the company had previously experimented with premium subscriptions.

The company, which has about 3 million users, would like to get the recognition others have received. “If you read about the MySpaces and the Facebooks, and the YouTubes and the Revvers,

you don’t see Multiply listed as often as we’d like,” CEO Peter Pezaris said last week.

The investment comes along with the launch of a Japanese localization of Multiply, as the American arm of Transcosmos specializes in bringing U.S. technology companies to Japan.

“From the Japanese perspective, we like a very clean and organized way—MySpace doesn’t work,” said Shin Nagakura, executive vice president of Transcosmos, which also has investments in Become.com, Pheedo, Edgeio, and Hipcast.

Mr. Nagakura said his focus for the next six months would be on doubling Multiply’s traffic and adding localizations for China and Korea.

The founders of Multiply had previously run Commissioner.com, a bootstrapped fantasy sports portal that was sold to CBS SportsLine in 1999 for $48 million.

FeedBurner

Also Monday, Chicago-based FeedBurner, a company that is not much further along than HotGigs, UnWired Buyer, and Multiply, said it had acquired Blogbeat.

FeedBurner specializes in feed management and analytics, with 200,000 publishers of blogs, podcasts, and established media signed up to route their 19 million subscribers to their sites’ 350,000 feeds through the company. Blogbeat, which is about a year old, does real-time blog analytics.

Terms of the acquisition were not disclosed, but since Blogbeat was a one-man show, the deal can’t have been too large. Blogbeat founder Jeff Turner will be FeedBurner’s lead engineer of web statistics, remaining in Raleigh-Durham, North Carolina.

FeedBurner, a 2006 Red Herring North America winner, has raised $10 million in two rounds of financing.

Contact the writer: LGannes@RedHerring.com

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