Micro-blogging service Tumblr has raised $30 million in new funding with backing from Sequoia Capital, Union Square Ventures and Spark Capital. The latest funding, which follows up on Mathew’s report last month that the company had raised a huge round, brings Tumblr’s total to about $40 million.
Tumblr, despite a well-publicized 24-hour outage earlier this month, has been on a tear lately, with monthly uniques tripling from 2 million to more than 6 million in the past year. It competes against Posterous and WordPress (see the disclosure below) and has grabbed a following of users who like to “reblog” and pass around content. The Tumblr staff blog said the company is in the midst of re-architecting the site to make it more fast and stable for the 11 million blogs it hosts. To that end, the company is adding five new engineers and adding a second data center that will triple Tumblr’s capacity.
Though my colleagues Om and Mathew have raised concerns of a rising bubble in tech with funding like Tumblr’s, these rounds seem to be new norm these days. But the larger question for Tumblr is how will it turn this funding, and the $5 million it raised in April, into profitability. This blog hosting business is not an easy gig – WordPress reportedly makes just $10 million in annual revenue, despite 300 million monthly unique visitors. It’s unclear if that figure is true but if so, it makes for hard economics for a company like Tumblr. With the new employees bumping up Tumblr’s headcount, let’s see if they can add some people who will kick the company into quick profitability.
Disclosure: Automattic, the maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.
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