Meebo, a web based instant messaging service has raised $9 million in series B funding from Draper Fisher Jurvetson and existing investors Sequoia Capital. The company had previously raised $3.5 million in Series A funding, mostly from Sequoia Capital. The company released its final product in November 2006, perhaps with an eye on raising new capital.
Tim Draper is the DFJ partner who is leading the investment in the year-and-half old company started by three Standord students Elaine Wherry, Sandy Jen and Seth Sternberg. Sternberg declined to give out the terms of the financing. It is interesting to note that Sequoia Capital, typically very territorial about its investments is not leading this round of investment.
Meebo is one of the players in a hotly contested web-based IM aggregation business, competing with the likes of eBuddy. While the growth of the company has been impressive, the questions around profitability and revenues of their business are still unanswered. Those are issues, which are of little concern to DFJ or for that matter any other VC these days.
DFJ was attracted to the investment, according to sources close to the company because it mirrors the growth curve of two of their previous successful deals — Hotmail and Skype. Meebo is said to have more than a million “Meebo” users and is a favorite amongst the high school kids, who often have their IM access blocked during the school hours.
(Disclosure note: Blacksmith Capital, a precursor to True Ventures, a VC firm that has backed GigaOmniMedia is an investor in Meebo.)
Great for Meebo. It’s the best Web IM I’ve tried, they deserve the funding. Though the it begs the question: How can they become profitable or self-sustainable?
9 million bucks, how on earth are they gonna earn this back?? No offense but it sounds like the burble is building up again…
I use eBuddy and Meebo, both the best web messengers out there, but what business model can justify this amount of money for Meebo. I think Meebo’s doing a good job, but at the end of the day they haven’t made a penny.
I geuss a quick build up and then go YouTube style.. take over by Google??
I kinda wish “the google” would eat them up. Meebo is just such a nice service to just disappear.
I agree meebo was great, I used it heavily while visiting India at a relatives house. Alot better than AOL ever did with their Java based AIM web clients.
Meebo is well executed. But to me its just a “feature” , not a product. Google added that feature to Gmail long back.
The reality is that acquisition is their only hope.
J | Sumolabs.com
Check out the new embedded version of Kool IM.
http://www.koolim.com
minor thing, it should read “Stanford” instead of “Standord”…gotta look out for my old stomping grounds ;)
Nice Review
Cool