© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
June 3, 2014 4:20 pm
It took five years for the founder of Imgur to decide he wanted to “conquer the internet”. By April this year, when Alan Schaaf took venture capital money for the first time, the photo-sharing platform was already halfway there.
Dominated by memes and gifs, from LOLcats (using pictures of real cats in combination with humorous captions that act as speech-bubbles) to less savoury captioned pictures, Imgur had a user base doubling year-on-year to 130m (or half of Twitter’s user base) without any marketing. Unlike most technology start-ups, which often go public before they enter the black, Imgur was profitable from the beginning. It sells some banner adverts and sponsored images including deals for the release of the latest version of Grand Theft Auto, a popular video game.
Mr Schaaf, founder and chief executive, managed this feat by closely coupling the site to Reddit, a news-sharing forum popular with young men. On Reddit, users can vote a link or discussion up or down, giving it more or less prominence, and on imgur, they do the same with images.
The start-up, in which Mr Schaaf invested just the $7 it took to buy the domain name, raised its first funds from Andreessen Horowitz, a Silicon Valley tech investor, which took a minority stake for $40m.
* * *
What do you get when you combine a former US navy SEAL, a creator of internet encryption and a former Apple security expert? A start-up well placed to make the most out of privacy worries in this post-Snowden era.
Mike Janke, Phil Zimmermann and Jon Callas created Silent Circle to sell ways to encrypt smartphone traffic from voice to data but is now starting to manufacture the Blackphone, a handset that promises a privacy-focused operating system and complete suite of privacy apps.
How can entrepreneurs raise finance to expand a business?
on Friday 6 June 1430 GMT
Partnering with Spanish mobile phone developer Geeksphone, the company will ship the Blackphone in June, aiming it at companies and governments worried about being spied upon by hackers working for the opposition and enemies.
Last month, the start-up with offices in Washington DC and London raised $30m from Ross Perot Jr, a property tycoon (and son of the eponymous politician), and Cain Capital. Mr Janke says it would use the money to meet the “overwhelming demand” for the Blackphone.
“With a customer base including consumers in over 130 countries, 23 of the global Fortune 50 enterprises and governments from 11 nations – we now have the resources to meet the demand for our encrypted mobile voice, video, secure file transfer and international secure calling plans,” he says.
* * *
Silicon Valley is not doing a very good job at keeping Secret secret. The app for sharing secretly is the latest of a new generation of more private social networks, following in the footsteps of ephemeral messaging app Snapchat.
But whereas Snapchat enables one-on-one communication with disappearing photos, Secret is a way of broadcasting something to all your friends, and their friends, without your name attached. If someone “likes” your secret, it spreads further. From rumours of tech deals that throw the industry into a spin to sweet yet slightly disturbing confessions, the app has been used for anything you cannot share on Facebook.
Founded by two ex-Googlers, David Byttow and Chrys Bader-Wechseler, the company is backed by a range of investors from Ashton Kutcher, the actor and tech obsessive, to Kleiner Perkins Caufield & Byers, one of the most-established venture capital firms in Silicon Valley.
In a blog post, the company explained why the app was more than a rumour monger but a platform that will bring “more authenticity, self-awareness and empathy to the world”. Secret said always speaking to a mixed audience of family, friends and acquaintances has made it harder to be authentic – and led to people losing real human connections.
* * *
From all-natural ice cream to premium spirits, farmers’ markets and local delis are full of small consumer goods companies that lack the funding to reach national or international markets. CircleUp aims to connect entrepreneurs that used to have to rely on financial contributions from friends and families with investors who can help support their growth.
Ryan Caldbeck, who funded larger consumer goods companies when he worked in private equity, and Rory Eakin, who invested in small businesses and social enterprises as director of investments at Humanity United, came together to found CircleUp in 2011. Their team vets potential investments looking for high growth rates and revenues of more than $500,000 a year before putting them on the site.
So far it has helped companies raise more than $30m from accredited investors, who can also offer connections and education to the start-up founders. Little Duck Organics sold fruit snacks to families in Brooklyn raised $890,000 from 24 investors to help them expand, while Kale chipmaker Rhythm Superfoods, got $763,601 as a convertible note from 10 investors.
CircleUp raised $14m in its most recent funding round in March led by Canaan Partners, with investment from Google Ventures, Union Square Ventures and others.
Please don't cut articles from FT.com and redistribute by email or post to the web.