Cheezburger raises $30 million to expand media empire
SILICON VALLEY (VentureBeat) - Websites like I Can Has Cheezburger, Fail Blog, and The Daily What may seem frivolous, but they've just attracted $30 million in venture funding for Cheezburger Network, the company that owns them.
Cheezburger's flagship site was founded in 2007 as a place for users to post "LOLcats" - pictures of cats with funny text. Chief executive Ben Huh and his initial investors purchased the I Can Has Cheezburger site (icanhascheezburger.com) and founded the Cheezburger company (cheezburger.com) in September of that year. The Seattle-based startup has been profitable since them, and it now attracts 16.5 million monthly visitors adding up to 375 million pageviews and 110 million video views.
Still, Huh said that without substantial funding, the company has had to think relatively small. The new money will allow Cheezburger to experiment and take more risks, he said.
Huh didn't rule out that he may launch or buy more sites (he offered to buy popular news aggregator Reddit last year) but added he's more interested in hiring engineers to improve the existing sites. For example, he said it's time to upgrade the LOLcat image-building tool on I Can Has Cheezburger, because it hasn't been improved in more than a year.
Huh previously told Reuters (here) he was looking to hire as many as 40 new staff this year, but added that number will likely be much higher.
"I think the minimum is doubling the company," he said. "We think this company can be more profitable and grow at a faster rate if we have the comfort of having money in the bank to go out and spend."
The funding was led by Boulder, Colorado-based Foundry Group. Avalon Ventures, Madrona Venture Group, and SoftBank Capital also invested.
Brad Feld, Foundry's managing director, will get a seat on Cheezburger's board of directors and said the company is poised to become "the world's largest humor network."
"I love the experimentation of the company. It's really wired into the very base of everything that they do," said Feld, whose firm had previously invested, along with Boston and San Diego-based Avalon, in popular social gaming company Zynga. "So they're constantly trying new stuff, they're constantly doubling down on the things that are working, the creativity of the business and the people involved in the business is awesome."
Avalon managing partner Rich Levandov, who will sit on the board with Feld and Madrona's Greg Gottesman, agreed, noting Cheezburger has "cracked the online media nut and the new financing will further accelerate the company's aggressive growth strategy."
$30 million seems like a lot of money for a blog network, but Huh said the investors aren't pressuring him to hit a specific revenue target, rather they're encouraging him to continue building the best company he can.
Here's how he explained his plan for building that company:
"The first generation of the Web was about e-commerce and news, it was about information gathering," he said. "The second generation is more about expression, and it's creation-driven. It was really the formation of Internet culture.
"Now we see something bigger there that we want to be a part of. How do we get there? I don't really have the answer. That's why this money is important to us, to try to experiment, to try to understand the market."
(With files from Reuters; editing by Jon Cook)
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