March 22, 2010
ChaCha raises $20 million for its Q&A service
Rho Ventures and VantagePoint invest in ChaCha's Web and text-message based Q&A service
People always have questions, and they always want answers. These days, a person can rely on that great big ball of information called Googlel to get an answer for obscure questions, like what's the release date for Bioshock: Infinite? It happens to be in 2012. For factual tasks a search engine is great. But what about when you need an explanation? If the information you crave is about the most haunted location in Jackson county, Ohio, or if you want to find out if freckles may be related to cancer, then a search engine may be more hindrance than help. With 25,000 sites, of varying credibility, weighing in on the topic, it is no surprise when information overload sets in. Sometimes you just want one answer.
That is where, Carmel, Indiana-based ChaCha comes into play. The four-year-old startup, which provides real-time, human-powered, answers, just raised $20 million. This was the company's Series F round of funding. The round was led by Rho Ventures and VantagePoint. This round brings the company's total funding raised to nearly $72 million. Previous investors in ChaCha include Bezos Expeditions, Morton Meyerson, the Simon family, Rod Canion, and Jack Gil.
ChaCha has answered nearly one billion questions in the past two years, and it sees 15 million unique users every month, according to its release. ChaCha also claims to have surpassed Google in mobile text search.
The company supports itself with ad revenues from ads placed into the answers from live guides, usually at the end of the message. Some of the companies that ChaCha works with include: Paramount Pictures, McDonald’s, Palm, Coca-Cola, AT&T, J&J, P&G, Wal-Mart, Best Buy, and The CW Network. While no specific sales figures were released, the company did state that its year-to-date ad sales are up 292% from the same period a year ago. In addition, its Q3 revenue is up 302% from Q3 of last year.
ChaCha did not say what it plans to do with this new funding, but it may have something to do with its soon-to-deploy MMS service.
The service will provide movie trailers, video clips, coupon images, and rich media ads, to a wide variety of phones.
This service will definitely help them distinguish themselves from competing sites, such as Formspring, JustAnswer, LawPivot and Quora, which also work with the question and answer format. Another competitor, Aardvark, was recently acquired by Google, for For $50 million, and is currently part of Google Labs.
ChaCha has not yet responded to our request for comment.
(Images courtesy of ChaCha)
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