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RRE Ventures and several others betting on Quirky's "social product development" platform
Quirky, a social product development company, has raised $6 million in Series A funding. The startup sent us over a press release earlier today. The round was led by RRE Ventures and included participation from Village Ventures, Contour Venture Partners, Lowercase Capital and a small group of angel investors. The company said prior to this round that it had raised $1.6 million in seed capital from friends and family.
I hadn't heard of this company, but it's a pretty interesting concept. The New York-based startup has built a community self-described as, "social product development."
Basically, it lets a dreaming user submit an idea at a price of $99, and hope to get it invented. The $99 gives the potential inventor access to Quirky's community of about 20,000 who can influence and give feedback on the product. The product is placed against competing products and if it wins the best vote, the idea goes into pre-order. If it receives enough pre-orders it goes into actual production.
Anyone can join the site for free and start participating and even influencing the product. If they positively influence the product they can potentially make some money off the sales, IF it gets invented. Quirky takes a cut of the profits as well,
"for each product manufactured and sold, the Quirky community receives 30% of the total revenue generated by direct sales of the product on Quirky.com, as well as 10% of revenue from indirect sales (wholesale orders and worldwide retail sales). That share of product revenue is divided among all the community members that influenced the product, based on their corresponding influence percentages." That's the fine print from its Website.
I browsed through some of the available products and most seem to be in pre-production, but the store has around 12 actually built and ready for sale. My favorite item, which is still in pre-production, the Beamer, an iPhone case with a built in LED light in the back which can serve to light up those shots you try to take at night with your flashless iPhone camera. It's also a convenient flashlight - $39 bucks, not to shabby.
Quirky said you won't get charged if you decide to pre-buy a product until it actually goes into production. So you're kind of reserving it.
I've reached out to see what kind of success and money the startup is making and am awaiting a response, but investors must definitely see some value in the platform buy pouring in $6 million.
The startup said it would use the funds for construction of a full-scale rapid prototyping shop, a global sales force, greater retail distribution, 24-hour design and engineering capacities, and added interactive collaboration tools.
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