Limbo 41414, a Burlingame, Calif. company that offers auctions of goods, and is focusing on mobile phone users, has raised $8 million more in venture capital backing.
The company is different because winners of its auctions are those who offer the lowest unique bid. The idea is that lots of people will offer a low 1 cent for goods, but then they won’t be the only one bidding that price, and so will be disqualified because they aren’t “unique.” Thus, they’ll tend to bid higher. Presumably, Limbo will have to give away a lot of goods at a loss before the company gets enough bidders to make this worthwhile. It hopes to draw masses of people to the bidding process, and thereby to make money through advertising (so that losing money on each auction is a worthwhile loss-leader).
The new financing comes from Azure Capital Partners, Draper Fisher Jurvetson and New Enterprise Associates. It follows an earlier investment of $9 million (our earlier coverage). See the company’s latest statement here.
The statement is somewhat misleading, with one investor suggesting the service reaches 230 million mobile phone users, when in reality that the size of the entire market, only a sliver of which Limbo 41414 has cracked:
“Limbo 41414 offers a compelling, effective medium for advertisers to reach the more than 230 million mobile phone users in the United States and Canada,” said Peter Sonsini, of NEA who will also join Limbo 41414’s board of directors.
The statement does go on to say Limbo 41414 has attracted “hundreds of thousands of unique mobile and online users.” It has had 650 auction winners and over $530,000 in prizes.
VentureBeat will attempt to follow up with the company, to get more insight into how it is doing.