SmallRivers raises $2.1 million for Paper.li

Highland Capital, SoftBank Capital and Endeavour Vision picture a world where social curation rules

SmallRivers, creator of Paper.li, a service that translates social streams into newspapers, announced Tuesday that it has raised $2.1 million in financing from Highland Capital Partners, SoftBank Capital and Endeavour Vision. Dan Nova of Highland Capital and Ronald Fisher of SoftBank will join the company’s board.

Previously, SmallRivers raised an undisclosed round in July 2010 from various angels, Econa (a German group of Internet companies) and Kima Ventures. The company got its start in 2008 with $1 million in seed funding.

Paper.li users have multiple options for creating social sharing-based newspapers. One example, of which I’ve posted a screenshot below, is a newspaper which compiles links shared in the last 24 hours by one Twitter user and all his or her followers. My example, The Ronny Kerr Daily, is what I got when I entered in my Twitter ID, @kerrronny.

Similar newspapers can be created based on Twitter hashtags or Twitter lists. Paper.li also provides more advanced curation options for both Facebook and Twitter-based newspapers, which can be made using keyword searches as parameters.

“Harnessing the convergence of the semantic and social web, Paper.li is at the forefront of the emerging ‘social curation’ market,” stated Dan Nova, General Partner at Highland.  “Paper.li represents the next wave of publishing by matching context and content from diverse streams of social media information and packaging it in an easier to consume manner.”

Since launching last summer, Paper.li has accumulated two million unique users and now operates in four languages (English, Spanish, German and French). The company says 140,000 user-created newspapers are published online daily.

Besides focusing on new growth, SmallRivers says the new funding will be used to expand from its Switzerland headquarters with offices in California.