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Sparkfly Raises $2.5 Million For Its Mobile Engagement Platform SparkQuest

Atlanta, GA-based Sparkfly has landed $2.5 million in funding for its mobile engagement platform, SparkQuest, which aims to connect consumer deal redemption with merchant point-of-sale technology.

This capability basically enables consumers to get instant and repeat rewards at the merchants they frequent most (merchant list here), as well as ‘experiences’ that are tailored to their personal interests.

SparkQuest also features interactive, game-like quests that are connected to merchant deals and rewards and allow consumers to engage with their friends and social networks.

Facts of Groupon’s and LivingSocial’s stunningly fast and continued growth notwithstanding, Sparkfly founder and CEO Catherine Tabor posits that consumers have ‘burned out on one-hit, mass-marketed daily deals’.

The company, founded in 2001, says it has dedicated several years to developing the technology that ‘fills that gap’, backed with a portfolio of more than 20 issued patents.

Sittercity Raises $22.6 Million To Connect Families With Caregivers

Chicago-based startup SitterCity has raised $22.6 million in funding led by New World Ventures and Baird Venture Partners, with Apex Venture Partners, I2A, and Point Judith Capital participating in the round. This brings SitterCity’s total funding to $30 million. Benedict Rocchio, BVP partner and Adam Koopersmith, partner with New World Ventures, will join the company’s Board of Directors.

SitterCity goes beyond just connecting families with child care. The site also offers access to caregivers for pet care, eldercare, home care and tutoring. Sittercity guides clients through an in-depth screening process of potential caregivers, which includes background checks, references and parent reviews.

To date, Sittercity has more than 2 million caregiver profiles across the nation, and has helped connect hundreds of thousands of parents find an in-home caregiver.

Sittercity has also built out a corporate program, where organizations and companies offer a branded Sittercity portal as a benefit to their employees. For example, the U.S. Department of Defense uses Sittercity to help military families, including active duty, reserve and guard, across the nation find in-home care. The Department of Defense actually provides these families with a paid membership to Sittercity. Other corporate clients include MasterCard, Avon, Sega, Fox and Northwestern.

The new funding will be used to develop additional corporate partnerships as well as for expanding the site’s services internationally.

Sittercity isn’t the first Chicago startup to raise a large venture round this year. GrubHub just landed $20 million in new funding.

PapayaMobile Raises $18 Million For Mobile Social Gaming Network

PapayaMobile, the developer of a plug and play technology that incorporates social gaming elements into iOS and Android games, has secured $18 million in Series B funding led by Chinese venture firm Keytone Ventures and DCM. This brings Papaya’s total funding to $22 million.

PapayaMobile hosts mobile games on its social network, which is comprised of over 15 million users and offers mobile developers the tools to build social gaming apps on Android and iOS. Since launching the gaming platform last year, 350 applications have integrated PapayaMobile. PapayaMobile has experienced over 375% growth in its user base since opening its social gaming network in June of 2010.

And Papaya has placed a big bet on the Android platform specifically. The company was one of the first developers to integrate Google Android’s in-app billing on its social gaming network to enable microtransactions.

The new funding will be used to help expand PapayaMobile’s developer ecosystem in both the U.S. and Europe and to improve serve infrastructure so that the company can scale. Papaya is also looking to expand its platform to the Chinese market.

Joe Zhou, founder and managing partner of Keytone Ventures said in a statement: Android growth in China over the next 2 years will be staggering…Couple this growth with the monetization potential of mobile games in China and we believe PapayaMobile is well positioned to be the leader in social gaming platforms for the largest mobile market in the world.

My Twitter Debate With Mike McCue: Why Does Flipboard Need $50 Million?

There is no question that Flipboard has an early lead in iPad news consumption. The company just raised a massive $50 million B round to cement that lead. This comes in between iPhone photo app Color raising a $41 million A round, and LivingSocial raising $400 million so that its founders and early investors could take half of that off the table. There is obviously a lot of venture money sloshing around, especially for high-quality companies and teams.
When investors offer startups a huge pile of cash at favorable terms, it is usually a good idea to take the money. And that’s exactly what Flipboard did. But does an iPad app company really need $50 million? And does taking too much money ever backfire? Flipboard is no lean startup.
Even if Flipboard wants to expand to other devices such as the iPhone, Android and so on, that doesn’t require that much cash. Maybe he needs all that money to build out an ad sales force (those are expensive). All of which begs a question which I asked Flipboard CEO Mike McCue last night on Twitter:
That sparked a debate between us. McCue fired back a series of answers:
@mmccue
Mike McCue @erickschonfeld @shervin considered that scenario seriously. I want to have plenty of runway left before we get to cf+ or new financing
@mmccue
Mike McCue @erickschonfeld @shervin also, this raise reduces risk of any unnatural forcing functions to generate cash which cld throw us off vision
@mmccue
Mike McCue @erickschonfeld @shervin finally, we will be insanely careful abt how we spend so we'll preserve options like doing small acquisitions,etc
McCue’s desire to avoid “unnatural functions to generate cash” strikes me as strange. That’s certainly a popular way to build startups: get consumers to fall in love with your product, then figure out how to charge for it later. But generating cash is one of the defining characteristics of every business. There is nothing unnatural about it.
McCue realizes this, and he had a good response. The $50 million gives him time to find teh best revenue model.
@mmccue
Mike McCue @erickschonfeld @shervin of course not. The key is to try to give company enough runway to pull off big vision vs. retreat to survive.
@mmccue
Mike McCue @erickschonfeld @shervin in other words: not all revenue is created equal. Best to go after most valuable revenue vs easiest. Takes time.
And then Shervin Pishevar, who somehow got pulled into the debate, ended it by Erickrolling me:

LivingSocial Financials Exposed: $2.9 Billion Valuation, $50 Million In Revenue Per Month

There’s nothing like full disclosure during the negotiating process in an acquisition deal. LivingSocial acquired SocialMedia for just $3 million in stock, we reported earlier today. As part of the negotiating process they disclosed key financial information to SocialMedia to help that company understand the value of the stock they were receiving in the deal. That information is now in my inbox.

SociaMedia is getting around 545,000 shares of common stock of LivingSocial, valued at $3 million. That implies that there are approximately 520 million shares outstanding. At the recent Series E preferred price of $5.65 per share (which is what most people would use for valuation purposes), LivingSocial is a $2.9 billion company.

LivingSocial is no Groupon when it comes to revenue, but it’s doing just fine. February revenue was $50 million, says our source, and projected revenue for 2011 (assumed calendar) is a cool $1 billion. Our best guess on Groupon revenue in February was a little under $100 million, so it’s roughly twice the size of LivingSocial.

LivingSocial Acquires SocialMedia For $3 Million

Fast growing daily deal service LivingSocial, which just raised $400 million, has acquired long suffering social advertising network SocialMedia, we’ve confirmed. The price was just $3 million, all in LivingSocial stock. Unfortunately, the company had raised around $10 million from Charles River Ventures, Marc Andreessen, Naval Ravikant and Jeff Clavier.
SocialMedia’s biggest asset today is probably its domain name. But a couple of years ago the company was tearing it up. They were one of the first companies to create a Facebook ad network that used your friends’ pictures in the ads. 2008 revenue was $15 million, and 2009 revenue was on pace to hit $25 million. Facebook tried to acquire the company, says one source. SocialMedia declined, and shortly afterwards Facebook threatened legal action against them for privacy policy violations.
What’s most fascinating about the acquisition isn’t the soft landing that the company has pulled off. It’s LivingSocial’s financials and capitalization information, disclosed during the deal negotiations, that has now landed in my inbox. More on that in a follow up post.
Update: LivingSocial Financials Exposed: $2.9 Billion Valuation, $50 Million In Revenue Per Month

LivingSocial Pulls A Groupon … And $200 Million Off The Table

Fortune’s Dan Primack reports that the LivingSocial management and investors have pocketed about half of the $400 million in new VC money they raised at the beginning of the month, citing this SEC filing.

This cashing out early thing is not without precedent, in fact leader in the daily deals space Groupon pulled a similar endeavor during its DST round last April and in January, where it took $573 million off of the table after its $950 million round of funding, allowing founder Andrew Mason to solve what he called “the money problem” or the temptation to succumb to buyout offers (like Google’s 6 billion) because you feel like you need the money.

LivingSocial has raised a total of $632 million in funding from Steve Case, Grotech Ventures, US Venture Partners, Amazon, T.Rowe Price and others. I’ve contacted the company for more information and will update this post if it responds with anything useful.

LDC Snatches Up Web Hosting Provider UK2Group For $77 Million Big Ones

Lloyd’s Development Capital (LDC), the private equity arm of Lloyd’s Trustee Savings Bank, the third largest bank in the U.K. (and state-backed) announced today that it has acquired a majority stake in leading web hosting provider UK2Group. The equity group paid a total of $77 million for its majority stake in partnership with the current management team.

Founded in 1998, the UK2 Group is an international provider of domain name registration and website hosting services, best known for its acquisitions of big hosting properties, such as midPhase and WestHost and for launching its own innovative hosting services, like 100TB.com and VPS.NET.

Ditlev Bredahl, UK2 Group’s CEO of 5 years will be leaving the company to focus on his role as CEO of OnApp — a cloud hosting software platform spun off from the technology behind VPS.NET. Phil Male, previously Chief Strategy Officer at Cable & Wireless Worldwide and Chief Operating Officer of Thus Group plc, was appointed by Lloyd’s as executive chairman.

With a state-backed bank behind them, and a reputation for acquiring hosting companies, look for UK2Group to be getting involved in some M&A activity in the near future.

News Reader FLUD Raises $1 Million From Cavs Owner, Others

FLUD, a news reader app for the iPad and iPhone, announced today that it has raised $1 million in seed funding from a flock of notable angel investors. The round was led by Quicken Loans Founder and Cleveland Cavaliers Owner Dan Gilbert and ePrize Founder Josh Linkner, through their new venture fund Detroit Venture Partners. Other investors include Ludlow Ventures and Behance Founder Scott Belsky.
Since launching in August 2010, the FLUD team has been working part-time on its news reader app, so Founder Bobby Ghoshal said that the startup will use its new funding to go after top engineering talent — and begin working on the project full time. At present, FLUD is only available on the iPhone and iPad, so the team will push towards becoming device and platform agnostic. With the new funding in tow, Ghoshal said that he expects FLUD for Android to launch within the next few weeks.
As an app that aggregates news feeds, you might be inclined to group FLUD in with other news apps like Flipboard and Pulse, but the founder tells me that the team has been working aggressively to reduce its reliance on RSS by building content partnerships with top publishers and news networks. And Ghoshal balked when I referred to FLUD as a “news reader”, telling me that the startup is trying to build a social news ecosystem that isn’t just another RSS-based news reader or social magazine (I think that’s a dig to you, Flipboard).
While the news reader was an important first step, his vision for FLUD builds a real peer-to-peer, social component on top of the traditional news reader app, but not just by relying on social networks to share. Ghoshal said that he wants to “go after realtime experiences of the kind of news that affects one person at a single point in time based on where they are, not who they know”. Right. The team is currently developing that underlying technology, but it sounds like FLUD will be adding some location-based services to serve us with hyper local news. (And probably deals.)
For those unfamiliar with the news reader, what’s great about FLUD is that it initially offers 25 curated feeds to choose from, but the options are unlimited. You can add as many feeds as you’d like, filling FLUD’s template through its list of featured feeds or by a simple keyword search, and a page is automatically created and filled with news from your chosen site.
On your iPhone, each feed fits neatly on screen, which highlights each site’s content, and both iPhone and iPad apps employ a scrubber that calls up a scroll bar, allowing you to quickly swipe past other stories. FLUD’s design and UI is sleek and impressive, I’m definitely a fan — I think the app does a great job of eliminating the feed mish-mash that’s part of so many mobile news reading experiences.
FLUD is nearing one million users, and as long as they can avoid the slow loading of previous versions, I think it could give your other news readers a run for their money.

View the original article here