Angie’s List, the site that lets users rate and review local service providers from doctors to dog walkers, just nabbed $6 million in subordinated debt financing and $1 million in equity. The investment comes less than a month after it took $18 million in venture debt, and less than a year since its $35 million round from Battery Ventures in April. The Indianapolis-based company, fairly unique in its ability to combine local search and user-generated reviews, has yet to disclose plans for the new money, but has mentioned a possible expansion overseas.
Around since 1995, Angie’s List maintains fairly traditional practices for a Web 2.0 service, with a live customer service center and actual human review of the content submitted by members. There’s even a section on the site called the “Penalty Box,” where it posts the names of companies that fail to respond to consumer complaints (right now, Redwood City, Calif.-based Water Quality Plumbing is taking the heat for lateness and incompetent drain-snaking). One step further, Angie’s List offers to contact companies on behalf of members to help resolve disputes. Apparently, it’s actually succeeded in getting some members refunds and repairs — kind of an odd personal touch in this day and age.
The site also prides itself on having no anonymous reviewers and not allowing companies to add themselves to the site, giving it an added dose of credibility. But these services and standards come at a price: a subscription fee of about $15 a month or $50 a year, which includes regular issues of Angie’s List’s quirky little magazine, highlighting different businesses and trends. The fee might be one reason the site isn’t growing very fast, adding only 150,000 users in the last eight months (now totaling 750,000).
With free online services like Yelp gaining momentum and trendy cred, Angie’s List — which seems to be targeted at the older crowd — will need to build member loyalty and maybe consider an image update to remain competitive. In the past, it has received funds from Aquent, BV Capital and Lighthouse Capital Partners in addition to Battery. The most recent round was provided by new investor Prism Mezzanine Fund. The company has raised $73 million to date.
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