Known to most for its link shortening service, bitly has raised another $15 million aimed at changing that perception. Bitly, a betaworks company, wants to be the “primary online service for sharing and discovering interesting content.” The new round, led by Vinod Khosla through Khosla Ventures, was announced Tuesday with existing investors RRE Ventures, OATV: O’Reilly AlphaTech Ventures and betaworks also participating. This is the third round for Bitly and brings the total investment to $28.5 million.
The recent redesign was meant to help it achieve that aim. My colleague Ryan Kim explained at the time: “The service has already helped people save 25 billion links since its launch in 2008 and is used daily to share almost 100 million links. The additions are part of a larger effort to make Bitly a hub for saving and sharing content on the Web.”
Bitly says daily registrations increased by 300 percent after the May 29th rollout. But the changes also showed how difficult it would be to leave the old bit.ly behind; after a lot of complaints by people who rely on the link shortening service, the easy way to shorten went back on the front page.
The company said the new funding “enables us to focus on growing the team to expand our social web products.” The Verge reported in May that bitly was out raising money and put the amount at $20 million.
Update: Caught up with bitly CEO Peter Stern after the announcement and he filled me in on a few details. (I added some of them to the section on funding above.) Contrary to the earlier report that bitly was out to raise $20 million, Stern said they started out much lower and actually had to increase the round to $15 million. He also said that Vinod Khosla will be joining the bitly board.
Bitly currently has about 40 employees, which, Stern added, makes it “significantly understaffed given what we’re trying to accomplish.” He wouldn’t pinpoint how many employees he hopes to add but said most of the growth would be on the technical side. Eight jobs are listed on the site now.
Among the products in the pipeline: some consumer variations on the enterprise analytics package bitly started selling three quarters ago.
When I asked how bitly was going to move from being perceived as a link-shortening service to a social discovery and sharing hub, Stern replied: “I think bitly is already built into the social fabric of sharing for millions of people.” He mentioned being stopped on the street when people recognize the pufferfish logo as an example of the awareness that is out there. But this isn’t just about bitly brand awareness — a lot of people don’t even know when they’re using bitly, which has an open API powers more than 10,000 custom short urls.
Is that enough to make this kind of investment pay off? A lot will depend on the kind of products that come out and whether they can be executed without singeing that social fabric.