Online research and shopping site completes first round of venture funding from well-pedigreed investors.
April 17, 2006

With a list of investors including Google advisors and online shopping veterans, Kaboodle’s first round of funding, announced Monday, brings it to the fore of the young social search and bookmarking space.

The year-old Santa Clara, California-based company helps users set up a page of saved search results for sharing with friends and the greater Internet. Kaboodle has focused on shopping in the past, but has changed its tune a bit to emphasize applications such as travel research and wedding planning.

The firm’s $3.55-million first round includes $1.5 million in convertible bridge funding from an earlier seed round.

The round was led by angel investors including Kanwal Rekhi of Inventus Capital Partners, Ashish Gupta of Junglee (a comparison-shopping engine acquired by Amazon), Google advisor Rajeev Motwani (a co-author of the company’s early search algorithm research), Google and Ask Jeeves investor Ron Conway, Shea Ventures, Garage Technology Ventures, and Alpha Group.

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Mr. Rekhi, who previously worked with Kaboodle CEO Manish Chandra at software tools vendor Versata, said he was drawn to Kaboodle because he had experienced the kinds of problems with search that the company seeks to address.

“Thousands and thousands of things show up, and you use paper and pencil to write down links, so you can’t share with anybody,” he noted. “It’s painful.”

Kaboodle’s competitive advantage, according to Mr. Rekhi, is its algorithm for extracting relevant information from the sites saved by users. He believes the company’s probable exit will be an acquisition. “Even Google could use something like Kaboodle for searches,” he noted.

Yahoo already has a similar tool called Shoposphere and acquired the social bookmarking site del.icio.us last December (see Yahoo Buys del.icio.us). Microsoft is also launching a service called Windows Live Shopping (see Microsoft Builds Search Skills).

Opening up the Web

Mr. Chandra said Kaboodle, which currently has 17 employees, would put its funds toward improving extraction, hiring more employees, and setting up co-branding partnerships with media sites.

In addition to contextual advertising, the company thinks it can profit from adding features such as trip planners to travel sites. However, that would entail convincing such sites to allow users to save information from elsewhere—even their competition.

Mr. Chandra contended that such sites need to “open up the web” and acknowledged that “trying to get [everything] in one place is really hard.”

At the moment, Kaboodle’s audience is fairly small. Mr. Chandra said the site has more than 35,000 users, with many of them coming in through prominent placement on Mozilla’s list of extensions for its Firefox browser.

By simplifying URLs and other measures, the company hopes to bring in users through search engines such as Google, MSN, and Yahoo. Mr. Chandra said one-third of Kaboodle’s traffic today is due to organic search.

An increasing number of users make their pages public—80 percent, up from 60 percent in November—according to Mr. Chandra. Though saving pages for the purposes of collaboration with friends and family seems like a safer bet, the company is hoping that its users’ research will be relevant to the general public.

That’s a common strategy these days, with Wink, Jookster, Prefound, and many other “social search engines” trying to harvest the feedback of searchers.

Monday’s funding round also included the investors Ignacio “Iggy” Fanlo, formerly of Shopping.com (now owned by eBay); Georges Harik, former director of new products at Google; Jeff Clavier; John Dougery; and Naren Bakshi.