Real time SMS answer service ChaCha raises $20M

Posted on October 15, 2010


ChaCha is a pretty cool service for real time answers through SMS call and response- get human-powered answers to any question – anytime, anywhere, all for free – on the web and through your mobile phone by texting 242-242. They just raised a bunch of cash, just showing that mobile engagement and the potential for solid advertising ROI is out there in the mobile space even though the over dollars of mobile marketing expenditure are somewhat low right now, that will change.

(Release) ChaCha, the #1 free real-time answers service, has closed a $20 million round of financing from new investors VantagePoint Venture Partners and Rho Ventures.

“We are fortunate to have VantagePoint and Rho joining this round of funding, which will allow ChaCha to continue to expand its real-time, human-powered, free answers service. Our new investors clearly recognize the value of our business, which helps advertisers ‘get into the conversation’ with ChaCha users who frequently ask their ‘smart friend’ questions about anything and everything,” says Scott Jones, ChaCha‟s CEO. “Our business delivers high value to both users and advertisers. It’s a compelling equation.”

ChaCha has answered nearly one billion questions in the past two years alone, having surpassed even Google in mobile text search, according to Nielsen. ChaCha is the industry leader in text-based advertising and has emerged as the single best place to reach the youth market in any medium. Between online Top 100 website,, and mobile platforms, ChaCha reaches over 15 million unique users every month.

In the course of answering questions, ChaCha creates a clever dialog with its users, which ends with a marketer’s call to action. Additionally, the company will soon deploy a new MMS service that will deliver movie trailers, other video, coupon images, and rich media ads to virtually all phones, not just smartphones.

Spending on SMS-related advertising programs alone is nearing $1 billion a year according to eMarketer. ChaCha has worked with some of the world‟s most prominent brand advertisers including Paramount Pictures, McDonald’s, Palm, Coca-Cola, AT&T, J&J, P&G, Wal-Mart, Best Buy, The CW Network, and hundreds of others. The Company‟s year-to-date ad sales are up 292% and Q3 revenue is 302% of Q3 revenue in 2009. Over 70% of ChaCha‟s 2010 advertising campaigns to date are renewals.

“Scott and his team have done an extraordinary job of establishing ChaCha as the most important brand in free answers and mobile advertising,” says Richard Harroch, Managing Director and Global Head of M&A at VantagePoint Venture Partners. “With the world shifting from desktops to mobile devices, ChaCha is well positioned to become a predominant search player because it provides real and useful answers.”