No Acquisition For Digg – Raise Series B Round Instead

Red Herring and VentureBeat are reporting that Digg closed an $8.5 million Series B round of financing from previous investors Greylock Partners and the Omidyar Network, bringing the the total of capital they’ve raised to just over $10 million. They previously raised $2.8 million in October 2005 from Greylock, Omidyar and several angel investors.

In a recent interview with the Digg executive team, they said that they are not yet cash flow positive but should be in the near future, and currently have 18 employees.

Digg competitor Reddit was acquired by Condé Nast in October. We mentioned the likelihood of an upcoming Series B round when we wrote about rumors that Digg was also in acquisition discussions with News Corp. back in October. While Digg disputes this, a few sources indicated that they tested the waters to see if they could sell for $150 million or more. When no offers came in, they raised additional capital instead.