The question and answer site Quora just announced that it recently closed a $50 million series B financing which valued the company at $400 million. Usually, the purpose of a large funding round like this is clear; Square, for example, raised a bundle of cash because they’re attempting to accelerate growth with expensive marketing and by giving away hardware dongles. With Quora, the purpose is less clear. There are only so many things you can do with raw cash to accelerate the growth of a question and answer community. So why would they raise so much? How could they raise so much?
Shayndi Raice, at The Wall Street Journal:
Mr. Heiliger said one of the key reasons he invested in Quora is because of his friendship with Mr. D'Angelo and Mr. Cheever when they worked together at Facebook several years ago.
“I know Adam and Charlie and think highly of both of those guys,” Mr. Heiliger said. “We worked hand-in-hand at Facebook.” […]
Josh Hanna, a partner with venture firm Matrix Partners and the only non-Facebook alum to invest in the current round, said what they learned from Facebook is that “you want to be the platform,” he said. “That’s where the value is.”
Interesting. Friendships and platform vision. With around 20-30k daily active users (according to AppData), it probably wasn’t money raised based on user adoption.
Adam D'Angelo has posted an answer on Quora explaining, in very broad terms, what they plan to do with the money they’ve raised:
We are going to continue making Quora the best place for people to share knowledge, and do our best to grow it into one of the most important products on the internet for everyone. To do that, we need to:
Build out the very best team to achieve this. […] Scale up technically. […] Focus on the long term. […]
The goals he lists do not seem particularly difficult; any decent startup will do those things. Why does Quora need $50 million to achieve them? Read D'Angelo’s full response here.