Startup Stumbles into Cash

Startup Stumbles into Cash

Web discovery toolmaker StumbleUpon leaves Great White North to join the crowds in fertile Silicon Valley.

May 16, 2006

StumbleUpon, which makes a tool for discovering new web sites, raised a round of angel funding Tuesday after moving from Canada to California.

The round, worth between $1 million and $3 million (an exact figure was not disclosed), came from a group of 10 angel investors, including Ram Shriram, Mitch Kapor, Josh Kopelman, Ron Conway, Rajeev Motwani, Ariel Poler, and Greg Waldorf.

That group has an impressive amount of experience behind them with a variety of Internet companies, ranging from  Google to Half.com to eHarmony.

San Francisco-based StumbleUpon, which has four employees, makes a recommendation engine. When its users don’t want to trust places like a search engine, Google News, or Boing Boing to surprise them with fun and interesting sites, they ask the free service to throw something new their way. Then the company incorporates feedback to better deduce appropriate fits for each user.

StumbleUpon’s current incarnation is a Firefox extension with over 1.8 million downloads across multiple updates and nearly 900,000 registered users. Users click the "Stumble!" button in their browser toolbar to see a recommended site, and occasionally one that has paid to be featured.

The company said it has recorded 500 million total stumbles, with 400 million of those in the last 11 months.

Users say whether or not they like a recommended site and can attach tags to describe it. StumbleUpon also processes the page’s content to classify it.

StumbleUpon founders Garrett Camp, Geoff Smith, and Justin LaFrance started the project nearly five years ago and were living on user donations in Calgary until recently. After deciding to move to San Francisco and raise funding, the three rejected venture offers in favor of the large group of angels.

Valley Outsider

StumbleUpon, perhaps refreshingly so, is a bit of a stranger to Silicon Valley in-groups. At an industry conference on Monday, both Kevin Rose of Digg and Joshua Schachter of del.icio.us (now owned by Yahoo) said they had not tried the StumbleUpon product.

Mr. Camp, on the other hand, named Digg and del.icio.us as his company’s primary competition in an interview last week. Digg and del.icio.us help users bookmark and comment on web sites and online articles, with a public and personal focus, respectively. Both sites’ user bases are uber-techies.

Del.icio.us had 300,000 users when it was bought by Yahoo in December (see Yahoo Buys del.icio.us). Mr. Schachter said the site’s growth has continued, but Yahoo would not disclose the current user numbers.

StumbleUpon, which has three times that many users, said they are a diverse group. The company’s users come from 139 countries and range from early adopters to "75-year-old retired army guys," as Mr. Camp, whose title is chief architect and director, puts it.

Appealing to techies seems to be a good recipe for success in today’s acquisition-heavy market, attracting the geeky buyers at Yahoo who have better access to mainstream users than a startup can get on its own.

Besides, moving to Silicon Valley effectively negates StumbleUpon’s outsider status.

Spending the Cash

StumbleUpon said it plans to hire a small group of engineers and salespeople with its new funding.

The company charges $0.05 per view of its ads and made about $250,000 last year. But it does not have nearly enough advertisers to fill capacity. Mr. Camp said he was exploring a bidding model for ad slots.

Planned features include integration with additional browsers, video stumbling, and Wikipedia mode. A proposed "stumble by keyword" option, in which users could specify a term to find new web pages rather than a broad category, might lower the serendipity factor but make suggestions a lot more useful.

Mr. Camp also said he’d like to partner with a search company, including Google’s new Co-op product (see Google’s Focus? Still Search). "We’ve already got a lot of data and they’re just starting up," he said.

 

StumbleUpon Sold to Auction Giant eBay

StumbleUpon Sold to Auction Giant eBay
May 31, 2007 7:41AM

The $75 million cash acquisition gives eBay access to about 2.3 million people who have filled out profiles at StumbleUpon, founded in 2001 by three Canadian software engineers in Calgary. The venture capital-funded company, which recently relocated to San Francisco, is considered a pioneer of the so-called "Web 3.0" niche.

 

 

 

 

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