Exclusive – SmallRivers, a fledging Internet startup based out of Switzerland that has developed a Web app called Paper.li that basically lets you turn Twitter streams, tags and lists into daily online newspapers, has landed more cash after inking a $1 million seed funding deal back in 2008.

Investing in this new round are a group of unnamed ‘reputed Web 2.0 business angels’ along with German investment and media group Econa and Kima Ventures, the early-stage investment firm started by French entrepreneurs Xavier Niel and Jeremie Berrebi.

Paper.li, launched in alpha mode last April, organizes links shared on Twitter into an easy-to-skim page that makes it look like an online newspaper’s homepage. Virtual, personalized newspapers can be created for any Twitter user (TechCrunch), list (Robert Scoble’s ‘most influential in tech’ list) or tag (#oilspill).

SmallRivers is now gearing up to launch Paper.li in beta, and says it has already attracted a lot of attention from established social and traditional media companies for partnerships. The startup is currently working on adding more functionalities to the service and adding support for a bunch more languages. The new beta version should go live in the next few weeks.

One partnership the small company is likely to strike is one with French national newspaper Le Monde – Kima Ventures partner Xavier Niel just snubbed France’s president Sarkozy in a bid to take over the paper along with Yves Saint Laurent Group partner Pierre Berg and banker Matthieu Pigasse. Niel is a self-made billionaire thanks to his 64 percent share of Iliad, the Internet broadband company he founded after an initial career running sex-chat services.

On a sidenote: Niel is also one of the many angel investors behind Jack Dorsey’s Square.

Colorful bunch of investors, but time will tell if their backing helps turn Paper.li into a real business rather than a cute gimmicky service.

Crunchbase

• SMALLRIVERS

Company: SmallRivers

Website: paper.li

Launch Date: 2008

Funding: $3.1M

SmallRivers develops web services that are facilitating the interconnection of people around shared interests. Its newest service is http://paper.li, a new way to look at streams (currently Twitter). SmallRivers is a privately held startup incorporated in Switzerland (Lausanne) and located on the Swiss Federal Institute of Technology EPFL campus, Scientific Park.

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