Zoosk looks to attract investors for new financing

Tue Aug 16, 2011 4:21pm EDT
 

By Alistair Barr

SAN FRANCISCO (Reuters) - Zoosk is looking to attract investors in a new round of financing for the fast-growing online dating website.

The San Francisco-based company recently hired Deutsche Bank to help it raise $50 million to $75 million, according to two people familiar with the effort. They spoke on condition of anonymity because the financing is private.

The new financing will help Zoosk pay for more marketing and international expansion. The company operates a dating community of more than 50 million users in over 60 countries and it recently extended a TV ad campaign from the United States into the UK and Canada.

"They're really growing fast, but the question is, how profitable are they?" said Anupam Palit, senior equity analyst at GreenCrest Capital Management, which researches venture-backed companies. "Zoosk has really ramped up the marketing recently to get their name out there. Momentum is very positive for them but they still need to spend a lot."

Zoosk competes with bigger rivals Match.com, owned by IAC/Interactive, and eHarmony, which counts Technology Crossover Ventures and Sequoia Capital among its investors.

Zoosk closed a $30 million round of funding in late 2009, bringing total financing at that time to $40.5 million from venture capital investors including Bessemer Venture Partners, Canaan Partners, ATA Ventures and Amidzad Partners.

Since then, Zoosk has grown quickly by using social networks like Facebook and embracing mobile applications. Earlier this year, Zoosk said its annual sales run rate had tripled to more than $90 million.

Over 5.5 million people are fans of Zoosk on Facebook, up from 2.7 million in February, while the company's app for Apple Inc's iPhone has been downloaded more than two million times. A Zoosk spokeswoman declined to comment.

(Reporting by Alistair Barr; Editing by Gary Hill)