Technology

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

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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’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.

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.

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.”

 

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