Cheezburger is in ur investment portfolio, spending ur cash. The publishers of online humor sites I Can Has Cheezburger?, FAIL Blog, Memebase and The Daily What have raised $30 million in funding. Venture capital firm Foundry Group, which also funded Zynga and Topspin, led the investment with Madrona Venture Group, Avalon Ventures and SoftBank Capital. Foundry Group managing director Brad Feld and Cheezburger CEO Beh Huh gave mbStartups the details.
“Ben and his team have built something that we think is pretty amazing,” Feld told mbStartups. “I think anybody who is part of Internet culture has seen pieces of the site, whether it’s something from FAIL Blog or one of the LOLs,” he said. Founded in 2007, the Seattle-based company owned by Pet Holdings, Inc. has attracted 16.5 million users, with 375 million page views and 110 million video views per month. “With very limited capital, they have [become leaders] in a category that’s emerged around user-generated content.”
Feld met the Huh through a mutual friend at the Twiistup technology showcase in Los Angeles. “I walked away and I said, ‘I need to spend more time with that dude,’” he recalled. The Foundry Group only invests in software and internet companies that fit certain themes, one of which they call distribution, meaning technology built for sharing. “We look for companies that are attacking an extremely large existing online market with an entrepreneur who’s completely obsessed about that market and approaching it in a unique way in terms of how they’re going to get engagement with their users,” said Feld, which is something he feels that the Cheezburger Network has done especially well. “I think the ability for Ben and team to really scale this up and make it into a major media property is significant. It’s easy for us to get behind it.”
According to Huh, “the vast majority of this money will go toward hiring new people,” the entrepreneur told mbStartups – “mostly engineers,” but also salespeople. Although Cheezburger runs primarily on advertising dollars (as well as books and merchandising), “we don’t have a single salesperson on our staff,” he said, which currently includes 45 people. For ad sales, the company relies on its ad networks and other partners.
The company will also address concerns from users, like the site’s caption tools, which haven’t been upgraded in a year and a half, said Huh. “We wanted to basically do what we were doing before, but more of it and faster.”
But Huh also plans “to take more risks in 2011,” he said. “That means we’re going to iterate, we’re going to test, and if those ideas don’t work, we’ll abandon it and try something else. That’s always been a part of our DNA.” When the company was bootstrapped, “it was about taking kind of sure risks; things we knew were going to pay off,” he said. Now, “we have the luxury of being able to dream bigger because we proved that we could do the smaller jobs.”
To learn more about how Ben Huh grew the Cheezburger Network, watch the Media Beat interview here.