iWidgets Raises $4.1 Million

Posted by: Rachael King on February 03

In this economy, it’s no easy feat to find funding for a start-up. Yet, iWidgets has snagged $4.1 million in Series A funding led by Opus Capital and University Venture Fund. San Francisco-based iWidgets helps companies take their content and syndicate it on social networking sites such as Facebook and MySpace. CBS, for example, is using iWidgets to syndicate video clips of CSI and other shows on Facebook. Fans simply add a Facebook application – also known as a widget – to their profiles and they can watch video clips of CSI within their profiles.

Today, social networking sites like Facebook and MySpace are drawing increasing interest from consumers, yet the same can’t be said for the individual Web sites of entertainment and media companies, according to Peter Yared, CEO of iWidgets. “Overall the Web sites of most content producers have experienced flat or decreasing traffic over the last 1-3 years while Facebook and MySpace have experienced massive growth,” he says, adding that content producers are worried about losing ad revenue. The trick, he says, is to put the content where the people are and monetize it with ads.

Worries about decreasing ad revenue might explain why iWidgets was able to sign three large clients during the fourth quarter, even while the economy was careening off a cliff. Yared says the names of those companies will be released at the end of the first quarter. With the iWidgets platform, each company will only need to build a widget once and then it will automatically syndicate to a number of different social networks.

Still, how did iWidgets manage to get funding in this economy? “They built the company in the right way,” says Ken Elefant, general partner at Opus Capital, an early-stage venture capital firm in Menlo Park, CA. “iWidgets was conservative in how they used their cash and they really proved that there was a business model there.” Part of being conservative meant keeping the staff small and lean with only 7 employees. Even though iWidgets has been in business for more than a year, the company just moved into an office space two weeks ago. “We’ve got a business model with revenue and customers,” says Yared. That may not be a revolutionary idea but it is certainly a novel one in Silicon Valley.