ChaCha raises $4 million

Chris Caceres · July 24, 2009 · Short URL:

Mobile search startup raises cash, not as nice as it may sound

 ChaCha, a mobile search startup, has raised $4 of $5 million in a fourth round of funding, according to an SEC filing.  

It’s been a series of awkward ups and downs for the company.  Back in March of this year, ChaCha raised $12 million in equity financing.  While using the cash to do things like open a New York office, ChaCha also laid of 25 of 81 employees at the time because it said it was, “reducing headcount, overhead, and expenditures through a series of cost-saving actions to ensure the company is positioned for long term success.”

This funding round for ChaCha didn’t turn out so glamorous either.  According to the SEC filing, $2 of the $4 million dollars will go towards paying back a loan from Citigroup.  

At the same time, ChaCha attempted to carefully announce its fundraising news, but failed entirely.  The company emailed TechCrunch of all outlets, which admits that they’ve, “just generally picked on this company incessantly,” about breaking the news and within 20 minutes emailed back saying it actually couldn’t speak with any media about its filing.  

So ChaCha has not disclosed any of the investors or what it intends to do with yet another round of fundraising.  The mobile search company has raised an estimated $62 million to date.  I’ve reached out to the company addressing these questions, but have not heard back.

A little bit about ChaCha – the company lets users text questions to a special number and then sends back answers to the texter.  It makes money by returning that text with a targeted advertisement.  Last month, ChaCha announced it had served a total of 150 million questions since its launch back in 18 months ago.  The company also lets users call a toll free line to ask questions or allows them to ask online.  ChaCha markets itself as, ‘ur mobile BFF.’

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ChaCha answers who, what, when, where and why, and has emerged as the No. 1 way for advertisers and marketers to engage their audience. Through its unique “ask-a-smart-friend” platform, ChaCha has answered nearly one billion questions since launch from more than 15 million unique users per month via SMS text (242-242™), online (, Twitter (@chacha), Facebook app, iPhone app, Android app, and voice (1-800-2-ChaCha™). Working with major brands such as Paramount, AT&T, Palm, Johnson&Johnson, P&G, Coca-Cola, McDonald’s, Sonic, and presidential political campaigns, is one of the fastest growing mobile and online publishers according to Nielsen and Quantcast.

ChaCha was co-founded by proven innovator and entrepreneur Scott Jones and is funded by VantagePoint Venture Partners, Rho Ventures, Bezos Expeditions; Morton Meyerson, former President and Vice Chairman of EDS as well as Chairman and CEO of Perot Systems; Rod Canion, founding CEO of Compaq Computer; the Simon family; and Jack Gill, Silicon Valley venture capitalist.