Investors in the financing round included Amerindo Investment Advisors, Donaldson Lufkin & Jenrette, Goldman Sachs and Meritech Capital Partners.
With the cash infusion, the company will beef up its "ongoing operational expenses" and launch an advertising campaign, according to Justin Kitch, chief executive of Homestead.
In addition, Kitch said the company has hired Busy Burr as the company's marketing head. The eight-year veteran of the Gap will report directly to Kitch. Burr led strategic and worldwide marketing initiatives at the Gap.
Homestead allows users to build customized home pages by dragging and dropping elements onto a template. These elements range from text boxes to stock quotes and photos. The company gains revenue through its partnerships with other Web services that want to become part of Homestead's list of elements. The company also supports advertising banners on its site.
The investment comes more than a month after Homestead began offering its home page building tools on Web portal AltaVista.