Mike Moritz, general partner with Sequoia Capital has a habit of investing in high growth consumer Internet properties, putting business model on the backburner and instead focusing on market share. He did it with Yahoo, and then with Google. (Okay we won’t hold Plaxo against him just yet.)
In fact this is the investment philosophy that drives Sequoia Capital’s consumer facing investments; one that has made them the big daddy amongst Silicon Valley VCs. (YouTube-Google is further proof, but that’s a well known fact by now.)
That is why it is interesting to figure out his next big play. And it is PopSugar, a site that is one of the fastest growing properties on the Internet. Disclosure: PopSugar’s parent company, San Francisco-based Sugar Publishing was started by two-and-half of my very good friends, Brian, Lisa and Katie Sugar. I apologize for intruding on your time.
The news of the investment first appeared here, and since then we have been scrambling to get some details. The focus of PopSugar is a demographic that is attractive to consumer advertisers – women. Moritz has invested close to $5 million in the company. Brian Sugar, who runs the company declined to comment and offer further details. (Michael Arrington and I had to share our resources in digging up information on this one.)
What is amazing is that PopSugar started as a lark! It was at a BBQ for Oscars, when I had casually asked Lisa why doesn’t she put all her knowledge about celebrity gossip to good use, and start a blog. Who knew she would take it seriously, and well, now PopSugar has close to 1.5 million visitors a month. They have plans to launch a series of other web properties and staying focused on the same demographic.
Sugar Publishing is not the only start-up going after the same demographic. Accel Partners has funded Glam. Most of these new companies will be going up against already established brands owned by CondeNast and Time Warner. The old media titans are being proactive in protecting their turn, and turning their consumer/women brands into Internet brands.