Formspring, the online question/answer service, has raised $11.5 million in Series A financing, bringing its total to $14 million. Now all the company has to do is figure out how to make money.
“$14 million is a ton of money, especially for a site that’s only a year old with no revenue,” notes Liz Gannes at All Things Digital.
It not only has no revenue, but no business model. CEO Ade Olonoh “has not yet figured that out,” reports CNET’s Caroline McCarthy.
Along with the financing, Formspring announced the creation of a “Respond” button that can be incorporated on outside Web sites, allowing the service to be distributed across the Web rather than centralized on Formspring’s own site. Sites such as Huffington Post and AskMen.com are already incorporating the button, which works somewhat like Facebook’s “like” button. Answers to questions are housed on the publishers’ own sites.
Again, there’s no indication on how this will yield returns for the company’s investors. Redpoint Partners and Baseline Ventures led the new round. In March, the company raised $2.5 million from a group of angels along with Polaris Ventures.
Most of the attention the company has drawn has been negative: The site, which allows people to ask each other questions anonymously, became a hive spam and nasty insults and bullying among its teen users.