Human powered search engine Mahalo raising $20M

[Update: This story is confirmed]

mahalo.jpgMahalo, the search engine that is powered by humans — furiously writing up results on those topics frequently asked by searchers — is seeking to raise a $20 million round of financing at very high valuation, we’re told.

We’re hearing Mahalo founder Jason Calacanis wants potential investors to value his company at $175 million, before they invest, which is lofty considering the company reportedly has less than 1.5 million monthly unique users.

Calacanis did not respond to a request for comment from VentureBeat.

Calacanis has been trying to promote the site with things like Mahalo Daily, a web show with a former CNET host named Veronica Belmont.

The financing round will be the company’s third. Calacanis told the WSJ (no link; subscription required) in May that he raised enough money from investors to last five years, so its not clear why he is raising more money now. [Update I: We’ve since confirmed the fund-raising plans with a second well-placed source. While Mahalo does have enough cash for five years, the company has decided to raise more money for opportunistic reasons; its a good time to raise money, and might consider an acquisition or partnership.] The investors include Sequoia Capital, News Corp., CBS Corp., PayPal Inc. founder Elon Musk, Dallas Mavericks owner Mark Cuban and others.

However, another human powered search engine, ChaCha, just raised $10 million more financing, so Mahalo may be seeking to hold its own.

See previous coverage here.

Daily Mahalo video is below.

[Update II: Calacanis has since gotten back to us, and said he wouldn’t comment on corporate matters. However, he argues 1.5 million uniques is impressive when you compare it to the traffic of ChaCha, Hakia and others. He said he has 50 employees, but also has 50 volunteers signing up each day to write up search result pages — so many, in fact, that Mahalo can’t handle them all. Last week, the company produced 1,000 new search result pages, more than three times the daily number it had expected when launching earlier this year, he said.]

http://blip.tv/scripts/flash/showplayer.swf?enablejs=true&feedurl=http%3A%2F%2Fmahalodaily%2Eblip%2Etv%2Frss&file=http%3A%2F%2Fblip%2Etv%2Frss%2Fflash%2F459870&showplayerpath=http%3A%2F%2Fblip%2Etv%2Fscripts%2Fflash%2Fshowplayer%2Eswf