Social Software Startup Garners Funding

 
 
By Matthew Hicks  |  Posted 2004-08-24
 
 
 

Preparing for more competition in the enterprise social software field, startup Socialtext Inc. has raised more than $500,000.

CEO Ross Mayfield said the investment will largely fuel product development for the company, which sells software for building wikis and Weblogs for enterprise collaboration.

Socialtext announced the Series A funding on Monday on its own blog. Mayfield declined to disclose the exact amount of funding but said it exceeded $500,000.

Venture capitalists have increasingly turned their attention to the social software and social networking arena with investments in everything from blogging and XML syndication services to online dating services and enterprise social networking.

For example, social networking startups LinkedIn Inc. and Spoke Software Inc. raised millions in funding last year, and competitor Visible Path Corp. garnered investments this year.

No single investor led Socialtexts funding round, Mayfield said. Most of the investment came from individual investors; they included Joi Ito and Jun Makihara of venture firm Neoteny Co. Ltd.; Reid Hoffman, CEO of LinkedIn; and Mark Pincus, CEO and founder of Tribe Networks Inc.

Also participating in the funding round were Omidyar Network LLC, a funding organization led by eBay Inc. Founder and Chairman Pierre Omidyar.

Click here to read what a panel a panel of industry observers at the Supernova 2004 conference thought about the societal implications of social networking software.

Mayfield said that he anticipates a growing number of competitors in the enterprise social software field, both from other startups and more established software companies. The funding round will help Socialtext gather further product requirements and quicken its product roadmap, he said.

"Now we have validated that there is a market and the category is attracting competitors, and its important for us not to lose lead in market and with the product," Mayfield said.

Socialtext, of Palo Alto, Calif., was founded in December 2002. It has 50 customers and in the second quarter of this year it reached a positive cash flow, Mayfield said.

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