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MotleyFool Gets $25 Million Investment; Some Existing Investors Bought Out

For those of you who always scratch their head when pondering about Motley Fool, its business and its future, here’s an answer at last: it has received a huge $25 million funding round, led by PE firms BIA Digital Partners and Patriot Capital. BIA contributed $15million, while Patriot invested $10 million in it. The new money will be used to “provide shareholder liquidity, growth capital and for general corporate purposes,” which means that some of the existing investors are being bought out.

The company was founded in 1993 by the two brothers David and Tom Gardner, and Erik Rydholm, who has since left. It focuses on investing and personal finance and besids the website has expanded into books, seminars and other educational services around investing. It recently launched an asset management business offering a retail mutual fund and a private fund for qualified investors. In Sept, the company sold off its then 5-month old UK consumer finance spin-off to its management/staff.

As for existing investors, Fool was once part of AOL’s Greenhouse project, so AOL (NYSE: TWX) may have held some equity in it. But it did its first formal round of investment in 1999, when it got a $26.5 million investment from Maveron and Mayfield Fund, and did another huge $30 million in a second round led by SoftBank Capital. So in all, including this current round, it has raised more than $80 million. More details in release.