Web-services firm gets venture funding
Washington Business Journal – 11:12 AM EDT Friday
by Ben Hammer
Freewebs has closed an $11 million first round of venture capital from Novak Biddle Venture Partners and Columbia Capital. The Silver Spring company, which was founded in 2001, plans to announce the deal next week. More than 10 million users have chosen the company’s free and for-pay tools to create online blogs, photo albums and other online content. The company also serves ads selected by Google based on user-generated content and recently began approaching major advertisers directly. Freewebs was hotly pursued by venture capitalists after the company pitched for investment at the May 31 to June 1 Capital Connection event in D.C. Since then, the company was in talks with venture capital firms on both coasts.
The company received a $1 million bridge loan earlier this spring from early backers Bobby Yazdani, the founder and CEO of public company Saba Software (NASDAQ: SABA), Silicon Valley venture capital firm Amidzad and Aydin Senkut, a former early Google employee. It’s unclear if they participated in this round. As the first round of funding was closing at the end of August, Freewebs announced it acquired Mad4Milk.net, a developer of Internet programming tools for Web 2.0 applications. Freewebs plans to create an “online community” for developers who want to use the tool to improve Internet applications. The company has also recently added some high-profile executives. Andrea Spiegel, the former AOL vice president of audience programming operations and planning, was hired a vice president of content and editor-in-chief at the beginning of August.
In July, Freewebs added Chris Cunningham as its vice president of advertising. He left Bolt Media, which has 11 million users who post video and content online, in July as senior vice president of sales. And in late June, the company brought on former Nextel Communications executive Robert Ewald as its first vice president of marketing and operations. Freewebs had paid its own way until this round. The company is profitable and generated $970,000 in 2004, according to Dun & Bradstreet. It has said 2005 sales were in the millions but wouldn’t be more specific.