ReachLocal Raises $55.2 Million; Valued at $305 Million
ReachLocal, a provider of local online marketing solutions for SMBs, has raised $55.2 million in new financing. This is on top of the $12.7 million it has raised since its founding in 2004. The new funds give ReachLocal an estimated valuation of $305 million, since it was previously valued at $250 million.
The money is coming from Rho Ventures, which recently made a bundle from the sale of Tacoda to AOL. It will be used to continue the company’s rapid expansion both in the U.S. and overseas, and for technology. In the past 12 months alone, ReachLocal has opened 11 sales offices in the top 10 DMAs. It expects to open a top-down DMA rollout in one market per month throughout 2008 and 2009. The company now claims to have “several hundred ad sales reps.” It sells for most of the local portal and sales engine leaders, including Yahoo!, Google, MSN, AOL and Superpages.com.
The company is led by Zorik Gordon (who is speaking on the SES part of ILM) and headquartered in Woodland Hills, CA. Its funding and valuation is likely to have a major beneficial effect not only on itself, but on competitors that also combine sales software, salespeople and sales channels, such as RHD’s LocalLaunch, Idearc’s Inceptor, WebVisible, Weblistic and Innovectra’s LeadStream — although the Yellow Pages is the immediate target.
“For me, this is a happy day,” says Weblistic President Dick Larkin. “It validates the importance of local online marketing.”