Exclusive: Flipboard Confirms $50 Million Funding at $200 Million Valuation
Late last month, BoomTown posted about a huge venture funding effort by the high-profile and even more highly designed social media reading app for the Apple iPad, Flipboard.
Today, its co-founder and CEO Mike McCue confirmed the $50 million round at an eye-popping $200 million valuation, in a wide-ranging interview at the start-up’s Palo Alto, Calif., HQ.
“We’re obviously thrilled, because we think it confirms our focus that people want a beautifully designed way to interact with content and to share it,” he said. “And there is a lot more to come–on a scale of one to 10, we’re just at a two or three.”
The bulk of the new second round of funding–Flipboard had previously raised $10.5 million–came from New York-based Insight Venture Partners.
Insight’s Jerry Murdock said in an interview that he was excited about the idea of “social endorsement” that Flipboard was pioneering.
“We back great entrepreneurs and Flipboard is that and also in an obviously unique position to solve a problem of media consumption in the digital age,” he said. “The sky is the limit. Or more precisely it is the best environment to consume curated real-time content for Twitter and Facebook, because of the user experience and social endorsement integration with the content.”
Insight is also an investor in Twitter.
Also stepping up in the new Flipboard round is Comcast’s venture arm, as well as previous investors, including Kleiner Perkins, Index Ventures and a spate of well known angels, such as Twitter co-founder and product guru Jack Dorsey, Facebook co-founder and Asana dude Dustin Moskovitz, the ubiquitous Ron Conway, actor Ashton Kutcher and the investment company of former News Corp. exec Peter Chernin.
“From a Comcast perspective, we’re intrigued with Mike and what he’s doing with content aggregation,” said Amy Banse, Comcast Interactive Capital’s new head. “We think we can learn from him and he from us.”
Co-founded by longtime entrepreneur McCue (Netscape, Tellme) and former Apple iPhone engineer Evan Doll in January, Flipboard launched to much attention in July.
The elegant Flipboard–which McCue recently told me in an onstage interview at the South by Southwest conference in Austin had zero revenues thus far–has changed the game on the consumption of social media.
Its innovative social magazine concept is attempting to make the social networking universe more accessible, consumable and, perhaps most importantly, visually arresting via its rich app.
Essentially, Flipboard pulls information from media RSS feeds and sites such as Twitter and Facebook data streams and then reassembles it in an easy-to-navigate, personalized format in a mobile tablet touchscreen environment.
In its current offering, there are pull-quotes, photos, videos, status updates and even the first paragraphs of linked-out content. There is also the ability to comment and share, as if one were on a social networking or microblogging site.
McCue said the new giant pile of cash will be used to increase its 32-person staff to about 50, international expansion, small acquisitions and more product development on more platforms.
The next in the arena will be the iPhone version of Flipboard, said McCue, followed by one for the Google Android mobile operating system eventually.
Left unsaid, of course, was the need for funding to fight the likelihood of increased competition in the hot space for delivering both professional and social content to consumers on a wide range of devices.
There are bigger potential players, such as Google, which is trying to find various ways to move into the social space.
In fact, said several sources, Google and others have made acquisition approaches to Flipboard, which has instead opted for raising more funding and staying independent for now.
McCue declined to talk about that, but did note that he is not surprised by publisher interest, especially of the worried and wary kind, in the arena.
“Anyone not respectful of others’ content is going to get in that kind of trouble,” he said, noting Flipboard has struck deals with 17 big publishers so far, including this morning’s announcement about a partnership with Oprah Winfrey’s and Discovery’s OWN cable network. “There is not one half to this equation.”
Right now, the Flipboard app is free and the business plan is advertising and some possible subscription scenarios.
McCue said advertising will be the key to Flipboard’s business plan in the future, although it’s not clear if the company will ever sell advertising itself.
Rather, it will partner with publishers seeking better distribution in the explosive tablet and smartphone market, where Flipboard has been gaining traction quickly.
But until that is sorted out, there is now $50 million more in the Flipboard kitty to figure it all out.
“With this funding, we can grow at the right pace and have a lot of flexibility to get the product right,” said McCue. “And, that’s the most important thing.”