Word-of-mouth advertising platform MyLikes announced Monday that it has raised $5.55 million in a Series A round led by Khosla Ventures, with participation from existing investors Lightseed Partners and Metamorphic Ventures. In addition to the startup's $630K seed round, the new capital brings MyLikes' funding to more than $6 million.
"As a firm, Khosla Ventures is known to make big and bold bets when they believe in the space, team or concept and we are very happy to have their support in helping us build our company," said MyLikes CEO Bindu Reddy in an email.
The company takes a unique approach to advertising and the age-old friend referral tactic, which has held that if people are more likely to buy what their friends like, then a business should reasonably be able to boost its sales by getting customers to recommend its service/product to their friends with the promise of big rewards. But people don't particularly like being used to help their friends earn rewards. It's lame and vaguely exploitative. Enter: MyLikes.
Leveraging the power of social media, MyLikes enables brands and advertisers to reach potential customers using "influencers," or people who have a hefty following on Twitter and YouTube. While influencers are paid, they can choose what to tweet about and can do so in their own words. For example, Kourtney Kardashian (also known as the second-hottest Kardashian) might tweet about a designer or a specific product that she likes, and she can earn up to $1.00 per click depending on her measurable influence.
MyLikes is one of a number of companies that are finding creative ways to use social media influence. The company measures a person's influenced based on the size of his/her audience on Twitter, Facebook, and YouTube. That influence score changes over time depending on how well the Influencer engages his/her audience, which shows up in the number of clicks he/she gets per post. The more clicks per audience member, the higher the Influencer's cost-per-click rate.
For advertisers, the process of getting influencers to talk about their product is a fairly versatile yet streamlined process which involves creating a campaign and identifying influencers they'd like to get on board, leaving an influencer free to post on a brand or product at his/her leisure while earning money for it.
It's a pretty innovative way of eliminating the "I'm being paid to pretend to like this product" flavor out of traditional celebrity ad-campaigns, since the influencers are free to post about brands and items that they actually like.
Khosla seems to think MyLikes is onto something as well. Khosla partner Alex Kinnier has joined the company's board of directors, along with Paul Buchheit, a partner over at Y-Combinator.
"Alex Kinnier, who is the partner from Khosla Ventures on our board, was previously a Google advertising lead and understands the brand advertising space really well. With MyLikes, we hope to change the way brand and discovery advertising works and we think Alex's expertise and insights will be hugely helpful," said Bindu Reddy, who added that the new funds will be used to fill out the company's engineering and sales teams (the startup currently has nine employees, six of whom are engineers and eight of whom are from Google).