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Summary:

Betaworks, a New York City-based Internet company, has raised $20 million in new venture funding in a round led by Intel Capital and RRE Ventures. Softbank, Founders Collective, DFJ Growth, AOL Ventures and the New York Times are new investors in the company.

Betaworks, a New York City-based Internet company, has raised $20 million in new venture funding, according to company executives. Intel Capital and previous investor RRE Ventures led the current round, which included Softbank, Founders Collective, DFJ Growth, AOL Ventures and the New York Times. The company had previously raised $8 million.

Betaworks, the brainchild of former AOL executives John Borthwick and Andrew Weisman, views itself as a holding company that both invests in and operates Internet and digital media companies.

In some ways for its investors, Betaworks is a bet on the newly emergent sector amorphously described as the real-time web. It is best known for its bets on the Twitter ecosystem.

The company first tasted success when it sold Summize, an early entrant into the real-time search market, to Twitter in July 2008 for a reportedly big stake in the San Francisco-based company. Since then Betaworks has launched and subsequently spun out URL-shortener Bit.ly, which ended up raising $2 million from the likes of Mitch Kapor and Jeff Clavier of Softech VC. It also created social media analytics company, Chartbeat, a company that emerged from the ashes of a failed Betaworks startup, Firefly.

In comparison to Bit.ly and Chartbeat, Betaworks is purely an investor in Tweetdeck, a very popular Twitter reader. “We have stakes in 24 companies –- some small and some large stakes,” says co-founder Borthwick. It owns a big chunk of five companies -– Bit.ly, Chartbeat, Tweetdeck, Twitterfeed and another startup currently in stealth.

Borthwick explains that the company will use the new funds to do two things: be more aggressive in investing in more startups while at the same time, do follow-on investments as their companies scale up.

Borthwick bristles at the idea of being equated to an incubator.  He views Betaworks as a holding company in the mold of, say, Liberty Media and Barry Diller’s IAC. Of course, on the other end of the spectrum are disgraced names from another era, like CMGI.

P.S.: If you want to get a better idea of how Betaworks thinks about the world of Internet and digital media, check out this  post from Betaworks’ Josh Auerbach.

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  1. It was smart to include the link to Josh Auerbach’s post. It helps to put everything in context. Until I read it, I was puzzled as to why VCs were investing in a holding company redolent of the now-unfashionable incubator model.

  2. congrats John & Andy & the entire Betaworks team :)

    “To Infinity & Beyond!”

  3. Sanjay Maharaj Thursday, March 11, 2010

    Thanks for th epost, very interesting to read about Betaworks and to see them invest in companies which eventually are winners. Full marks to John and Andrew, great work guys.

  4. Incubator Betaworks raises $20M | Bondholder Thursday, March 11, 2010

    [...] in five companies — Bit.ly, Chartbeat, Tweetdeck, Twitterfeed, and a stealth startup — according to GigaOm. Although the firm is commonly known as an incubator, Borthwick reportedly prefers to compare it to [...]

  5. Dave Finkelstein Friday, March 12, 2010

    NYC needs more tech and media startup. its way behind given its size and number of schools and wealth

  6. Ilan Ben Menachem Friday, March 12, 2010

    good work …John Borthwick and Andrew both of them.your growing your business very well.

  7. Betaworks Raises $20 million from Intel and others « The Blog of Gobi Canada Monday, March 15, 2010

    [...] Continue reading this article. [...]

  8. THINK / Musings | betaworks series b Sunday, October 24, 2010

    [...] week we announced a series b funding round at betaworks. Since then several people have asked us what we do at [...]

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