ChaCha Closes $20 Million Funding Round

Gail Chiasson, North American Editor

Indianapolis-based ChaCha, the #1 free real-time answers service on web and mobile, has closed a $20 million round of financing from new investors VantagePoint Venture Partners and Rho Ventures.

This will allow ChaCha to continue to expand its real-time, human-powered, free answers service.

“Our new investors clearly recognize the value of our business, which helps advertisers ‘get into the conversation’ with ChaCha users who frequently ask their ‘smart friend’ questions about anything and everything,” says Scott Jones, ChaCha‟s CEO. “Our business delivers high value to both users and advertisers. It’s a compelling equation.”

ChaCha has answered nearly one billion questions in the past two years alone, according to Nielsen. ChaCha is the industry leader in text-based advertising and has emerged as the single best place to reach the youth market in any medium. Between its online Top 100 website and mobile platforms, ChaCha reaches over 15 million unique users every month.

In the course of answering questions, ChaCha creates a dialog with its users, which ends with a marketer’s call to action. Additionally, the company will soon deploy a new MMS service that will deliver movie trailers, other video, coupon images, and rich media ads to virtually all phones, not just smartphones.

Spending on SMS-related advertising programs alone is nearing $1 billion a year according to eMarketer. ChaCha has worked with some of the world‟s most prominent brand advertisers. Its year-to-date ad sales are up 292% and Q3 revenue is 302% of Q3 revenue in 2009. Over 70% of ChaCha‟s 2010 advertising campaigns to date are renewals.

“Scott and his team have done an extraordinary job of establishing ChaCha as the most important brand in free answers and mobile advertising,” says Richard Harroch, managing director and global head of M&A at VantagePoint Venture Partners. “With the world shifting from desktops to mobile devices, ChaCha is well positioned to become a predominant search player because it provides real and useful answers.”

Harroch and Mark Leschly, a managing partner at Rho Ventures, will join ChaCha’s Board of Directors.

Since inception five years ago, ChaCha has raised capital from prominent tech leaders, venture capitalists, and angels, including Jeff Bezos (founder and chairman of, Morton Meyerson (leader of EDS and Perot Systems), Rod Canion (creator of the portable computer industry), Jack Gill (co-founder of Vanguard Ventures), Don Aquilano (MP of Gazelle TechVentures), members of the Simon Mall family, and others.

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