Facebook alternative Ello had one of the shortest journeys from hype to backlash in recent tech memory, but that hasn’t put investors off the company. Yesterday, it announced a $5.5m funding round, while also registering as a “public benefit corp”. Why is the latter important? Because according to Ello, it means the company will be legally unable to show ads, sell user data or sell the company to any buyer who’d do either of those. So, legal backing for the company’s ad-free stance, which has been there from the start. So why are VCs funding a business with these principles? One of the backers is Foundry Group, and its Seth Levine blogged about the investment. “We’ll either build a business that doesn’t rely on third party advertising or the selling of user data or we won’t build a business,” he wrote. “Our belief is that there are products and features that Ello can develop that users will be willing to pay for. While the price points may be low, as part of a much larger ecosystem with millions of users, will provide an economic model for the company which supports the business and our investment.”

EarPods and phone

Tools: platforms to help you reach new audiences

Tools: Kaiber

In the year or so since its launch, AI startup Kaiber has been making waves,…

Read all Tools >>

Leave a comment

Your email address will not be published. Required fields are marked *