Ello Raises $5.5 Million to Stay Anti-Corporate
When a small group of disgruntled Facebook users decamped to Ello four weeks ago, a million more people followed looking for The Next Big Thing in Social Networking. But Ello's newcomers didn't find much reason to stick around, and the anti-advertising "Facebook killer" is already fading away into the internet's collective memory.
Investors, however, aren't concerned with the public's fleeting interest in Ello. They're not even deterred by Ello's anti-commercialization bent. Instead, three of Silicon Valley backers just poured millions into Ello so the Vermont startup can stay pure.
According to Wired, Foundry Group, Bullet Time Ventures, and FreshTracks Capital invested $5.5 million into Ello. That money is being used to float the embryonic social network that promises users it'll never sell out.
After announcing their new funding, Ello sent a mass email to all their members explaining how the startup's new charter will require them to never sell advertising:
To assure that Ello always remains ad-free, today Ello converted to a Public Benefit Corporation (PBC).
A Benefit Corporation is a new kind of for-profit company in the USA that exists to produce a benefit for society as a whole — not just to make money for its investors.
The Ello PBC charter states in the strongest legal terms possible that:
- Ello shall never make money from selling ads;
- Ello shall never make money from selling user data; and
- In the event that Ello is ever sold, the new owners will have to comply by these terms.
PBCs are still for-profit entities. Note that the charter doesn't prohibit Ello from taking investment from profit-seeking financiers. It also doesn't rule out money-making schemes entirely—Ello is still free, for example, to charge brands for accounts, or license their technology to enterprise corporations.
Regardless, shunning commercialization while accepting millions in venture capital is a popular growth strategy. Quora has famously taken more than $160 million from investors without ever once taking in a dollar of income. But unlike Ello, people occasionally look at Quora.
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