Ello raises another $5M, launches new beta version

by Doug Pitorak
April 3, 2015

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Ello
, an ad-free alternative to today’s dominant social networks, continues its rapid growth and development.

The startup, based in Denver and Burlington, Vt., announced Thursday the closing of a $5 million Series B round and the concurrent rollout of Ello Beta V2. Foundry Group, Techstars Ventures and FreshTracks Capital contributed to the round, as they did with the $5.5 million Series A round Ello closed in Oct. 2014. The funding is equity-based, Ello CEO and co-founder Paul Budnitz said, adding that the founders still control the board by a “longshot”.

According to Budnitz, Ello has been in beta since late August of last year, when it launched with 90 users. Today, millions of people use Ello, he said.

“Basically we came out of the box and we were just a really rough beta, and a bunch of people really loved what we were doing,” Budnitz said. “And back in October, November and December, we just had a lot of people join at once. In fact, so many people were trying to get on that we took the site to invitation-only to keep the traffic down, mainly because technologically we couldn’t handle it.”

Budnitz said the team is rolling out Ello V2 at a rate of 100,000 people an hour. Users can request an invite on the homepage or can be invited by existing users. The rollout should not take more than a week, Budnitz said.

After creating a login, users might automatically have access to Ello V2 or they might still be on the original beta. The rollout process is randomized, Budnitz said. The team pauses user onboarding to perform load tests. Ello V2, after all, has a completely new frontend and backend. Onboarding could be paused for 15 minutes or a few hours before it resumes, he said.

The company is a for-profit public benefit corporation, making illegal any effort by anyone to force Ello to sell user data or serve advertisements.

The Ello Manifesto concludes with the following: “We believe a social network can be a tool for empowerment. Not a tool to deceive, coerce, and manipulate — but a place to connect, create and celebrate life. You are not a product.”

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Ello believes in a good user experience, too, evidenced by some new features in Ello V2. Users can now use full-screen browsing and navigation, expanded search, improved discovery, drag and drop editing, and more. Ello V2 integrates with CodePen, enabling users to code web apps and insert them in their Ello posts.

Budnitz said Ello is hopeful that apps for iOS and Android will launch this spring and the company will be out of beta this summer.

Looking to grow

The funding, Budnitz said, will be used to grow Ello in accordance with the team’s vision and from the inside out.  

“We’ve been very careful because we want to build a place that’s really filled with what we think of as the best people and the best content, rather than the most people and the most content,” Budnitz said, adding that the team never wanted to compete with networks like Facebook.

Also, Ello will use the funding to hire employees. According to Budnitz, Ello is looking for developers and customer service/community manager people to add to its team, which is under 30 persons. He said the development team is based mostly in Denver, while he and much of the community team resides in Vermont.

The network is free to use. Though Budnitz said that Ello doesn’t need to make money right now — jovially citing Ello’s promising t-shirt craze as one reason why — he did say Ello will eventually offer additional services that users can pay for. One such feature, Budnitz said, might be the ability to control multiple accounts through one login.

From an investor’s perspective, ignoring Ello’s rapid growth might be difficult.

"We're very excited with the continued momentum at Ello,” Mark Solon, managing partner at Techstars Ventures, who will be joining Foundry director Seth Levine on the Ello board, said in a statement. “This is a company whose business will literally change the world."

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