(Updated below with comments from chief executive George Garrick)
Jingle Networks, a Menlo Park start-up which provides free phone directory assistance, has raised a whopping $30 million more in venture capital — upping the ante in what is now a crowded field.
This area has become popular because people find this an easy way to avoid the $1 to $3 they get charged using regular DA service.
Jingle, which markets itself as 1-800-Free-411, supports the free service by injecting advertising snippets in it responses. If you call them at 1-800-Free-411 looking for a particular local pizza company, for example, you may be offered a voice ad from a competing pizza company.
Competitors (see our early stories here and here), include San Diego’s 800ideas.com, which provides different 800 numbers depending on the city you are in, and Palo Alto’s 1-800-411-Save. (Update: InFreeDA, a San Francisco start-up that went live earlier this year with 1-800-411-METRO, has effectively closed shop. Thought he company told us in August it hadn’t closed down — and was just doing a major restructuring — we just tried using it, and got an “all circuits are busy” message, twice.)
The venture round is significant because it brings the company’s total funding up to about $30M over the past year (it got $26 million in April, and $5 million in December, three months after launching).
This latest third round was led by Goldman, Sachs & Co. and Hearst Corporation. Previous investors Comcast Interactive Capital, First Round Capital, IDG Ventures Boston and Liberty Associated Partners also participated.
Jingle says it now enjoys three percent of DA calls in the U.S., accounting for more than 13 million inquiries from more than four million consumers each month.
Among its advertising customers are CBS, which promoted its fall lineup with audio spots in the DA responses, and 1-800-flowers.com and 1-800-Mattress.
Chief executive George Garrick told VentureWire in a story (sub required) this morning that the company’s post-money valuation was “about $150 million.”
[Update: We just got off the phone with George Garrick, who confirmed the valuation was "slightly higher" than $150M. The large amount of cash is needed, he said, to build out the service. Advertisers come later, because they don't take a company seriously unless it can show five to ten million calls a month, he said. And he says Jingle has hit the tipping point, with about 450,000 calls daily. He expects revenue of between $1 and $5 million this year -- he wouldn't specify further -- and "ten times" that next year, he said. He said Jingle is the clear leader in free DA service, in part because of its more recognizable number. InFreeda has shut down, in part because of its less memorable name, he added. Palo Alto's 1-800-411-Save, meanwhile, is only placing between 5,000 and 10,000 calls a day, he said. We've reached out 1-800-411-Save for comment. No one else has raised close to this $30M, he pointed out. His real fear (he corrects; he did not say he feared them) assumption is that the carriers will unveil an ad-supported free DA service, he said.]
15 Comments
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Adam said:
1-800-411-Save is a good one in the same space (http://www.1800411save.com/). What is Free 411 doing with all of that money???
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Hugo said:
Jingle has the potential to be one of the bigger flameouts in recent memory. This is a NEGATIVE margin business, and those red numbers seem to keep getting bigger. Given their current call volume and lack of advertisers (1-800-Flowers is a reference account? Big trouble!), this extra $30 million may not fund the business for twelve months.
Matt, this is one for you to watch closely.
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will said:
Hugo,
Not completely true, its a negative margin business right now for Jingle, but I’m sure they are probaly 70% to the critical mass needed to break even. Goldman’s involvement in the deal means that the financial model makes sense (and is “projectable”) and Goldman want in on the IPO/M&A fees. . . at $30M investment, the post money is probably above $120M . . . given that M&A’s might no be much more than $250M, I suspect they are doing better than you think . . . I doubt GS wants to wait more than 12month for an exit these days after getting burned in the dot-com days on all these mid-stage deals.
My question is how is tellme playing in this space (if at all). . . probably powering RBOC’s solutions with complete automation.
I do find it interesting that sometimes I call jingle and I get a live agent and sometimes I get an IVR.
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Matt Marshall said:
Folks, just updated with comments from Garrick, which explain why he needs to raise so much cash, and in part answers the question about getting that critical mass. Looks like he’s almost there.
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pwb said:
Count me in the naysayers. Not because it’s a bad idea (it’s a decent idea) but because that kind of valuation will force them to do stoopid things. That they think they need to get that big before advertisers considers them indicates they have no understanding of AdSense and local advertising.
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kgg said:
Call volume is not a determinant to sales: the quality of sales model is. Inventory of 10,000 calls per day can be sold. People buy if they are sold, that’s the bottom line. For every product there is a fixed conversion rate: so hypothetically if all businesses are contacted there is at least 3% conversion rate and that’s a lot of money. Comparably, free DA, in addition to capitalizing on live leads, can reap same profits for ads comparable to radio ads.
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kgg said:
Vanity numbers, due to being free and easy to recall actually make the market. Research analysis suggests that vanity numbers for this business model will magnify the market by, conservative estimate, a multiple of 3X – That’s 25B in annual ad profits. Carriers should not panic, since at this point they likely lost way less than 1% of the DA business line.
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Eric Jackson said:
Look at the backgrounds of the managers and investors. Josh Kopelman and Chip Hazard are rock stars. These guys lead the space and will take substantial share from the big incumbents.
Good luck,
Eric
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phillip jackson said:
hey guys…. if you are really after free 411 that does business as well as residential numbers.. try this… dial 1-800-411 7283….it works!!!! fast and friendly operators..go ahead!!! you have nothing to lose… :-)
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Kevin Meed said:
I’d like to thank everyone involved in giving us chance to save from our directory assistance expense.I just learned about this 1800 411 save and its real.I can instantly get the information I need from their friendly and efficient operator at no cost..I just only hope people are aware of this fantastic deal.Everyone should try this.
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phil2009 said:
I agree with Kevin. I love 1-800-411SAVE! It’s back and with the help of live people (not computers!), you get all the needed listings!
13 Trackbacks
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VentureBeat Wire » Jingle gets $30M for free directory assistance said:
[...] See our story here. VentureBeat Community [...]
10:57 am
GigaOM » Jingle Goes Big said:
[...] Free directory assistance provider Jingle Networks said today it had raised $30 million in Series C financing, bringing its total funding to over $60 million and its post-money valuation to more than $150 million. Jingle has been able to attract so much money because it’s bringing the ad-supported business model that we talk about all the time to an area that’s relatively unpolluted with ads. [...]
11:34 am
Cisco TelePresence, Jingle, Vista Security, MLM’s trying to be social networks!! « Technically Speaking said:
[...] Jingle just raised another $30 million in series C funding. They are now worth $150 million, and you can read more about them here. [...]
11:48 am
This reminds me of that « Sharing the truth one thread at a time said:
[...] Exactly why wouldn’t this Jingle Networks, a Menlo Park start-up which provides free phone directory assistance, has raised a whopping $30 million more in venture capital — upping the ante in what is now a crowded field. [...]
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Techcrunch » Blog Archive » Jingle Networks Has Now Raised Over $60 million said:
[...] Today Jingle Networks announced a fourth round of financing - $30 million from Goldman Sachs and Hearst Corporation, at a valuation of around $150 million. This comes after a $26 million round in April 2006, a $5 million round in December 2005 and a small angel round of financing last year. 1 800 Free 411 [...]
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TechCrunch Japanese アーカイブ » Jingle Networksã€ä»Šåº¦ã¯$60M(6,000万ドル)ä»¥ä¸Šã‚’èª¿é” said:
[...] ãã‚“ãªä¸ã€Jingle Networksã¯ä»Šæ—¥(米国時間10/23)ã€ç¬¬4ラウンドã§Goldman Sachsã¨Hearst Corporationã‹ã‚‰$30M(3,000万ドル)を調é”ã—ãŸã¨ç™ºè¡¨ã—ãŸã€‚ãƒãƒªãƒ¥ã‚¨ãƒ¼ã‚·ãƒ§ãƒ³ã¯ç´„$150M(1å„„5åƒä¸‡ãƒ‰ãƒ«)。åŒç¤¾ã§ã¯ã“ã‚Œã¾ã§2006å¹´4月ã«$26M(2,600万ドル)ã€2005å¹´12月ã«$5M(500万ドル)ã€æ˜¨å¹´ã¯å°é¡ã®ã‚¨ãƒ³ã‚¸ã‚§ãƒ«æŠ•è³‡ã‚’å—ã‘ã¦ã„る。 [...]
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Jingle Networks Has Now Raised Over $60 million « My Interests said:
[...] Today Jingle Networks announced a fourth round of financing - $30 million from Goldman Sachs and Hearst Corporation, at a valuation of around $150 million. This comes after a $26 million round in April 2006, a $5 million round in December 2005 and a small angel round of financing last year. [...]
10:55 am
Jingle Networks Has Now Raised Over $60 million » JenIT said:
[...] Today Jingle Networks announced a fourth round of financing - $30 million from Goldman Sachs and Hearst Corporation, at a valuation of around $150 million. This comes after a $26 million round in April 2006, a $5 million round in December 2005 and a small angel round of financing last year. [...]
4:14 pm
Plasma Diary - An aggregation of latest updates in Gizmo World! » 1-800-Free-411, Liberate Yourself From Crappy Cingular’s Excessive 411 Fees said:
[...] 1-800-Free-411, Liberate Yourself From Crappy Cingular’s Excessive 411 Fees By Administrator VentureBeat � Jingle gets $30M to grow its free directory assistance service Matt Marshall over at VentureBeat has an article on Jingle Networks getting another $30 million in VC money to continue operations. Jingle is the company behind 1-800-Free-411 which I use all the time and which is awesome. [...]
5:43 am
iPhoneSystems - VoIP News and info » Jingle Goes Big said:
[...] Free directory assistance provider Jingle Networks said today it had raised $30 million in Series C financing, bringing its total funding to over $60 million and its post-money valuation to more than $150 million. Jingle has been able to attract so much money because it’s bringing the ad-supported business model that we talk about all the time to an area that’s relatively unpolluted with ads. [...]
9:41 pm
Free 411 Service at ProBargainHunter.com said:
[...] Since we are on the free telephony subject I want to mention another awesome free service that saves me $5-$10 every month — free directory assistance: 1-800-FREE-411 or 1-888-FREE-411. The service seems to be the only one left. The competitors (411-SAVE and 411-METRO) are either struggling financially or have closed down. [...]
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Our Latest Discovery » Free411.com: Free directory assistance at 1800FREE411 said:
[...] does it work? In our experience, pretty well. While Jingle Networks (the company that owns and operates the service) indicates that in the future advertising will [...]
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VentureBeat » Jingle Networks rings up $13M for directory assistance said:
[...] written about Jingle before. Back in 2006, we reported that it had just taken $30 million with a $150+ million valuation, driven by [...]