Big funding news today: Quora has raised an $80M Series C in a round led by private equity firm and hedge fund Tiger Global. The valuation wasn’t disclosed.
The Series C is an excellent time to examine the startup’s business model. With $151 million now in the bank and almost five years under its belt since founding, you’d think the company would finally tackle monetization. You’d be wrong.
First, some context: In its short history, Quora has ridden the tech hype cycle to its highest highs and lowest lows. The founders largely shirked press attention, granting few interviews, but that didn’t stop the Valley from heaping praise on the company during its earliest years, placing it on the tippy top pedestal. The only place to go from there is down, of course, and down Quora fell in Valley eyes, from beloved breakout hit to inevitable failure.
As Pando has covered, Quora’s most compelling content and growth happened after it had already lost favor with the tech elite. In 2013, the user metrics tripled. As another benchmark, its head of business operations Marc Bodnick said Quora’s total number of deep topics — defined as 100 or more questions with solid content on the page — went from 1,000 to 6,000 in the last few years alone. Quora finally achieved its once seemingly impossible goal of quality Q&A at scale.
In covering Quora’s progress last year, Sarah Lacy asked the inevitable question: Can smart make money?
Assuming Quora cracks mobile this year it has another challenge in store for 2014: Monetization…D’Angelo may have found millions of people who want to be smarter. But making money off them will be another matter.
At the time, October 2013, Quora founder D’Angelo told Lacy the company wasn’t quite ready yet. It needed to be bigger, more distinct, and develop an ad product uniquely suited to Quora’s audience that avoided — as Lacy put it – the bargain basement clicks-o-sphere of the Web. D’Angelo said that 2013 wasn’t the year, but maybe 2014 would be.
Well, 2014 has arrived and the company hasn’t budged any closer to the revenue diving board.
“We are interested and excited about making money, but we believe it will be easier and more productive to do that as we get bigger,” business operations head Marc Bodnick says. “What you might think as big enough we just don’t.”
When asked for specific realms the company still needs to tackle, he cited international expansion and multi-language support as examples. For now, Quora is only available in English despite users clamoring for other languages. Furthermore, Bodnick said there’s all sorts of behind-the-scenes engineering challenges the company wants to solve prior to monetization.
“The challenges we work on keeping quality high get more complex as we get bigger,” Bodnick says. “Duplicate questions and ranking and distribution…. We didn’t get to work on this a year ago because we weren’t big enough.”
Monetization is Quora’s reckoning — the point where its quality Q&A model will either prove itself profitable or not. Is it possible that the company is just afraid to jump in, preferring to focus on the challenges it has already solved rather than tackle the new ones?
“I don’t agree with [that],” Bodnick says. He pointed out that Quora founder Adam D’Angelo helped build Facebook’s initial ad targeting system. Thus, when the time comes D’Angelo is ready to tackle the issue for Quora. When pushed on a more specific timeline — the company has been vaguely saying “next year” since 2013 — Bodnick was evasive. “We will likely experiment with monetization sometime between now and the end of 2015,” he said.
Of course, with the added Series C money Quora has the luxury to avoid monetization for the far distant future. It’s not alone in this approach. Pinterest has been around for roughly the same amount of time and raised $338 million in venture before rolling out a single paid promoted pin.
When Quora finally does decide to get around to drumming up revenue, the potential seems big. Much like with Google searches, people frequently come to the site in search of specific information. It’s not hard to imagine advertisers salivating over the targeted marketing opportunity.
Until then though, Quora has the luxury to ignore the issue altogether and keep worrying about making quality scale. In a blog post announcing the news, founder D’Angelo said:
These new funds would be enough to get us to break even if we wanted them to, but we may raise more in the future if we want to invest in development more heavily. For now, we are fortunate to be able to put 100% of our resources toward sharing and growing the world’s knowledge.
The magic of the funding fairies.