14 DAY TRIAL // Bit.ly, the largest URL shortener on the web, has announced that it closed a series B round of funding totaling $10 million. The round was led by RRE Ventures and AOL Ventures as well as existing investors contributed. Eric Wiesen, General Partner at RRE, will be joining the bit.ly board.
"We are excited to announce that bit.ly has completed Series B funding. The Series B was led by RRE Ventures," betworks CEO John Borthwick announced.
"We are also excited that AOL Ventures has joined the round, along with the existing investor group who participated: OATV, Mitch Kapor, Founders Fund, SV Angel, Joshua Stylman, Peter Hershberg, David Shen, and betaworks," he added.
Twitter's move into URL shortening caused many to question bit.ly's future. The service has grown explosively thanks in large part to being the default option on Twitter.com.
However, Twitter rolled out its own URL shortener, arguably not a direct competitor to bit.ly, with a lighter feature-set. Despite this, the service has continued to grow, which might explain the investors' trust in the company.
Bit.ly only raised $5 million since launching two years ago. While the company achieved scale relatively fast, it grew along with Twitter during the microblogging's most fruitful times, in spring last year, revenue came later.
For now, bit.ly offers pro accounts to about 4,000 companies and individuals, which it bills for $1,000 per month. Note that not all companies pay for the service since they were part of the beta test. Still, it adds up to a nice sum for the service and should cover at least operational costs.
But the company is looking to cash in on its most valuable asset, the data that comes from the hundreds of millions of links it decodes each day. In total, bit.ly says, 40.6 billion links have been decoded this year and the number is still seeing healthy growth.
The new round of funding will help the company build a business around all this data. One project that bit.ly is said to be working on along with the New York Times is news.me which will surface the most popular stories based on what users are sharing in real-time. Google is experimenting with a somewhat similar project.