Quora Raises $50 Million in Series B FundingBy: Mike Fossum - May 15, 2012
Quora, a sort Q&A site organized by its community of users, has just raised $50 million in Series B funding, with a valuation of $400 million. Co-founder Adam D’Angelo, former CTO at Facebook, put up $20 million of his own money, and Peter Thiel, Benchmark Capital (they had led Series A and Benchmark’s Matt Cohler is on the board), Northbridge Ventures and Matrix Ventures contributed the rest.
On the Quora company blog, D’Angelo answers some questions regarding how the platform will allocate the $50 million:
Build out the very best team to achieve this. There are many challenges in getting high-quality knowledge about everything onto the web. We need to design a great product to help everyone to easily share their knowledge with the world, to look up and learn from the knowledge that others have shared, and to give us signals about the quality of everything they read. We need to build and improve our systems that use all of these signals to automatically figure out which content is the most interesting, appropriate, and relevant to each person and show them only that.
Scale up technically. As we grow, we need to build new systems that can handle the increased scale, and our infrastructure costs increase. We need to make sure that as we build these new systems they increase the speed at which we can iterate on the product rather than slowing us down. We project a large portion of this money to go to EC2 and other AWS bills. It might be replaced by whatever the most appropriate place for us to run our infrastructure is in the future but as of today it’s looking like EC2.
Focus on the long term. We intend to use some of this funding as a cushion in case of macroeconomic changes. More than half our series A funds from two years ago are actually still in our bank account today. We could have waited longer to raise this round, but we wanted to extend our runway. That lets us keep our focus on long-term growth and quality, and lets us avoid making short term tradeoffs like many other companies.
Quora presently garners about 180,000 monthly active users and about 20,000 daily active users. Some wonder how this sort of traffic might validate $50 million in funding. Quora had been in the news quite a bit in 2011 as an intriguing meld of Wikipedia and Twitter, but its relatively small user base indicates that investors must predict some significant growth – which D’Angelo mentions in regards to expanding infrastructure. Still, 20K active daily users?
Like most things internet, perhaps the deal has to do with Facebook. D’Angelo was the former CTO of the Social Network, and Thiel was an early investor. Maybe they’ve banked on an association with Facebook’s impending IPO, which has already sold out.