Online shopping search engine Become.com brings in $7.2 million ahead of summer product launch.
First-round backer TransCosmos of Bellevue, Wash., led the year-old start-up's second round, with Ron Conway and Bob Bozeman of Angel Investors, a Silicon Valley-based group of individual investors, also providing funds.
Become.com co-founder and Chief Executive Michael Yang said the start-up spoke with outside investors, but cited dilution concerns as rationale for not inviting them into the deal. A small portion of the new funding, however, did come from first-time individual investors, whom Yang declined to name.
"We decided to keep our existing investors and complete the deal quickly so that we could focus on product development and our upcoming launch," he said.
Adding Become.com's $4.5 million first round, completed last September, to the new round brings the company's total funding to $11.7 million. Yang and TransCosmos each contributed $2 million to the company's first round, with the remaining $500,000 coming from outside angel investors including Conway and Bozeman.
Yang would not say whether Mountain View, Calif.-based Become.com anticipates raising another round of funding or whether the current round would be enough to carry it to profitability. Nor would he discuss the company's valuation, except to say that it rose significantly between the first and second rounds.
"We have no commitments to raising more capital, but we're open to the possibility," he said.
Founded in early 2004 by Yang and Yeogirl Yun--both of whom were among the creators of MySimon.com, a comparison shopping site acquired by San Francisco-based CNET Networks (the publisher of News.com) for $736 million in 2000--Become.com launched a beta version of its Web site earlier this year. The search engine focuses specifically on online retailers and product information sites, filtering out other references that might turn up on general-purpose search engines. The company plans to add a price comparison feature to its Web site before this summer's full product launch.
Become.com's Web site initially required registration, but that restriction was removed in April. As a result, the number of users doubled between March and April, according to Yang, who added that the number of repeat visitors has spiked recently as well.
Reflecting its founders' experience, Yang said Become.com will include both Web search and comparison shopping elements. Google's Froogle service has similar features but doesn't include such things as product reviews in its search results.
"Our biggest competition is Google," said Yang. "There are other sites that are all about finding the lowest prices, but we're the only one that integrates search and shop."
Become.com has already begun reaping revenue from its searches, with income based on advertising, lead referral and cost-per-click agreements. The company will allow retailers to pay for placement in search results, although Yang said its algorithm also takes into account the popularity and reputability of online merchants.
Mark Tanoury of Cooley Godward provided legal assistance to Become.com in the round.
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