San Francisco-based SendMe has raised a $12 million round of capital to grow the company organically and through acquisitions. The company has three main products: SendMeMobile, which sells ringtones and other content through a subscription; SoLow, which allows people to play games with the chance of winning a prize for a monthly fee; and mbuzzy, which is a free social networking site. SendMe distributes the products through partners, like imeem which encourage its music subscribers to sign up for SendMe’s services.
Investors in the fourth round of funding include a new lead, Triangle Peak Partners, while existing investors True Ventures, Amicus Capital, Spark Capital and GrandBanks Capital, also participated. The company has raised $35 million in total.
More after the jump from an interview with CEO Russell Klein, who explains the opportunity for ringtones and premium SMS in today’s market….
Russell Klein, SendMe’s CEO, said the round was relatively easy to raise, even though the economy is struggling and the big opportunity for ringtones and wallpapers has passed. Klein: “Ringtones, wallpaper and mobile content is one small thing of what we do…We have three brands, and 20-plus premium SMS services. What investors found compelling is that you can take our platform and launch a series of brands. Each can be targeted to a demographic and they can target any sweet spot of the market at the moment. We still see a lot of runway on mobile content. It might be shifting from ringtones and wallpapers to other areas, but the premium SMS sector is really nascent.”
Klein said we are seeing significant growth in its initial SendMe product, but that 2008 was a break-out year for SoLow, which could easily become the company’s largest property in 2009. Klein said they will likely launch a new model for mbuzzy in 2009 that will include both free and pay services. The money will be used for working capital and for potential acquisitions, but will also provide a cushion in case the economy provides any unforeseen challenges.
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