Social network with a business model?

Gather, raises $5.3 million for its ‘make new friends’ site

Gather, is one of those few social networking startups that says it actually has a profitable business model. 

The privately held company, announced on Tuesday it’s received another $5.3 million in equity financing from major investors including Allen & Company and American Public Media.  Gather has raised over $30 million since its launch, with previous investors including Hearst, The McGraw-Hill Companies and Southern California Public Radio.   

The Boston-based startup aims its site at an over 30 audience.  In fact, it markets its site heavily on NPR.  Its catch is that instead of connecting with friends you already know, like Facebook does, Gather allows users to connect based on things they love to do or want to talk about it.

As for money coming in the door besides funding, Gather makes its cash through display ads.  The company stated in its press release that due to increasing adoption of engagement marketing on Gather, the company reported Q1 bookings up 49% over the same quarter in 2008. Gather raised this additional capital to fund operations at its current run rate through to profitability expected in early 2010.

Gather says it now reaches 1M uniques/month.