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Columbus Venture Capital

SynthaSite Gets A $20 Million Boost For Simple Website Creation Software

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There have been simple, browser-based website creation tools available on the market ever since the WWW turned mainstream, but there’s clearly still a significant demand for this type of services, especially with the way the web is evolving.

SynthaSite is one of the players in the DIY website / blog builder field, and they’ve just gotten a huge vote of confidence from their investors: the company has announced a $20 million Series B round from Luxembourg-based Reinet Fund and plans to use the money to grow both organically and through selected acquisitions (they made a first small one past December when they bought Clickpass).

This is actually the same investor as the $5 million Series A round it raised in November 2007, but then then-called Columbus Venture Capital was recently restructured into Reinet, which is now a listed entity on the Luxembourg & Johannesburg Stock Exchange with over $2 billion in market cap.

No word on the startup’s valuation, although co-founder and CEO Vinny Lingham (also an occasional blogger) tells me it was definitely not a down-round and that they’re in it for the long run. He also added that the company is growing nicely, boasting 1 million registered users and graphs clearly showing an upwards traffic trend (Quantcast). Compete shows a similar curve.

SynthaSite makes building simple websites a breeze, but in that it doesn’t differ much from the dozens of similar services out there (e.g. the just launched DevHub, WebJam, Sampa, Jimdo, Weebly, webme and many many more) apart from the fact that they integrated a bunch of third-party services into the application (e.g. WidgetBox for widget distribution, Picnik for photo editing, etc.). SynthaSite is also up against services from established companies, like Microsoft Office Live and Google Sites. It remains to be seen if the now heavily-funded startup will be able to keep growing at the current rate in this economic climate and with an increasingly competitive playing field.

As for the business model: SynthaSite generates revenue from domain names sales only (as an affiliate to Network Solutions) as the service is entirely ad-free. Premium services (like advanced features, unique templates, etc.) are coming later this year, says Lingham.

Strategy-wise, SynthaSite is looking for partnerships with ISPs and large computer manufacturers and internet companies, who could offer a co-branded solution to their users without paying SynthaSite for the service but rather getting a chunk of the revenues back from the company.

It’s a good strategy, but many have tried – and are trying – to do the same, so again, the jury is still out if SynthaSite will be able to justify the faith their investor obviously puts in them in the years to come.

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