Ello, an ad-free social network which styles itself as a rival to Facebook for the privacy conscious raises $5m million in new venture funding
Ello, an ad-free social network which styles itself as a rival to Facebook for the privacy conscious has raised $5m million in new venture funding.
Ello (www.ello.co), the ethical social network has registered itself as a public benefit corporation in order to ensure that it can never display ads. Having raised $5.5m from venture capitalists in its Series A funding round, the new legal status commits the company to abide by its ethical principals.
Chief executive Paul Budnitz said the money will be used on product development – including building the back-end infrastructure to cope with its growing user base.
The number of people using the site soared last month, going from tens of users to hundreds of thousands in a matter of weeks.
At one point, the invite-only site was receiving up to 50,000 requests per hour and had to freeze applications because its servers could not cope.
Ello’s Chief executive Paul Budnitz was previously a toy maker.
Mr Budnitz hopes to fix the site’s digital infrastructure with the $5.5m (£3.4m) of new funding from investors.
The company’s manifesto guarantees an ad-free experience on the site, and says it will never sell user data to advertisers.
Instead, it is likely to make money by charging for micro-transactions and other optional features.
To show its commitment to the public promise, Ello’s co-founders have now converted the company into a public benefit corporation in Delaware, which means it has to prioritise and provide “a benefit to society” alongside profits for shareholders.
Mr Budnitz said: “This company will never have ads and will never sell user data.
“We’ve basically enshrined, in the most powerful legal way possible, our mission into the company.”