Lots of blog chatter this morning about Aggregate Knowledge, a behavioral search company that just scored $20 million in Series B funding from DAG Ventures and Kleiner Perkins. See here, here and below. After all, it’s not too often that a widget company raises double-digit venture dollars. Moreover, it’s not too often that a company seeds the journalistic clouds by sending out an embargoed press release with the actual round amount X’d out (brilliant strategy, worked like a charm).
What hasn’t yet been reported, however, is that one of AK’s primary competitors also raised new VC funding… And it raised more.
That competitor would be ChoiceStream, which said in a regulatory filing that it has raised $25.79 million. ChoiceStream declined to discuss the deal, which is really too bad because the filing itself seems to indicate that the company is now valued in excess of $250 million.
How so? Because Regulation D filings require identification of any shareholder with a greater than a 10% voting interest in the company. So let’s assume that ChoiceStream followed that rule of thumb – even though such an assumption might make an ass of… well at least me.
The ChoiceStream filing lists only three institutional shareholders: General Catalyst, Sutter Hill Ventures and a family trust affiliated with ChoiceStream CEO Stephen Johnson. Each had participated on a prior Series B round, and apparently holds more than a 10% interest. None of them, however, are the source of the new $25.79 million – because the filing reports that the entire amount came from a single investor based in Texas (none of the aforementioned are based in Texas). So if a single investor contributed over $25 million and received less than a 10% equity stake, the company must be valued in excess of $250 million.
For context, Matt Marshall is reporting that AK received a post-money valuation of more than $70 million.
In case you’re wondering who the Texas investor is, join the club. My original guess was Austin Ventures, but they denied it. Ditto for Sevin Rosen. I’ve got one more thought – more a hedge fund than VC fund – but will hold off until asking them directly.
For more on AK, check out this 5 Questions I did with company CEO Paul Martino. Seems the big round number is primarily for biz dev, including a new product feature that allows “discovery” accross websites, instead of just within a single one (current product is like Amazon’s “Customers also purchased…”)