A service ChaCha adds $7M funding to $69M total
Indiana-based startup ChaCha was founded in 2006 as a cross between Ask.com and the Mechanical Turk: Users would ask a question, and they’d be connected to another human being who would provide an answer in a real-time chat session. In short, it didn’t work out.
In early 2008, ChaCha ditched that business and reinvented itself as a question-and-answer service for mobile phone users. Text ChaCha a question, and they’ll text you an answer. The company ran a promotional campaign to provide election-year research that fall. (You can use ChaCha from a desktop, too, but their business focus is on text messages.)
The company claims substantial funding for its efforts. In January of this year, they announced $30 million from unnamed investors. Today, ChaCha says they’ve added another $7 million from anonymous lenders, bringing the company’s total funding to $69 million.
That’s a hefty pile of loans for a startup. What I’m hoping the company will get back to me on is: How will they make money? The company sells ads served with its answers. Does that bring in enough revenue to make what seems like a labor-intensive business profitable? Is there some tech trickery that automates the answers?
And since when do late-stage investors in a startup — ChaCha has already gone through rounds A, B, C and D — not want everyone to kn0w about the smart investment they’re making? For seed funding it’s typical to be coy, but not so much closer to a hopeful IPO or acquisition.
I couldn’t find a designated press contact, so I texted my questions to ChaCha’s SMS address, 242242. I’ll update here if they write back. Sorry, I couldn’t resist.
(Update: ChaCha sent this reply to my BlackBerry: “Thanks for you Q, we are experiencing temporary network problems. Please try again later!”)
