When GoodGuide — a web site that rates products based on how “good” they are, in terms of social and environmental practices — launched in September founder Dara O’Rourke told us that the company had raised an undisclosed amount of funding from New Enterprise Associates and Draper Fisher Jurvetson. On Monday, Pehub.com brought us a little more of the details on that round: according to a regulatory filing, GoodGuide raised $3.73 million in a Series A round.
The size of the round is tiny compared to many recent fundings in the large and diverse cleantech sector, from solar projects to biofuel plants to smart meter firms. Green web investments are a way that investors can fund a cleantech startup that requires a lot less capital than, say, power generation, and they can also be more familiar to investors — like DFJ and NEA — that built their business funding Internet and IT firms.
GoodGuide will likely be using the funds for its 12 full-time and 12 part-time employees, who collect the data on the products, and for also building out the web site. The data used to rate products on the site come from hundreds of private and public sources, among them government; nonprofits; and private, third-party research firms. The data collection process and the rating system are meant to create a sense of trust and authority for the site. However, getting visitors to see such ratings as trust-worthy and authoritative is difficult; Good Guide’s success at earning consumers’ trust depends as much on marketing and outreach as on actual practices.