Sharpcast Raises $10 Million In Down Round For File Syncing

Sharpcast has raised a $10 million round from existing investors Sigma Partners, Draper Fisher Jurvetson and Selby Venture. This brings the total raised to $26.5 million. The round is described as a “Series AA,” which implies that it was done at the same or lower valuation as the original Series A back in March, 2006. I’ve asked the company for clarification on that. Update: It was indeed a down round (i.e., at a lower valuation). CEO Laura Yecies confirms:

This series is labeled ‘Series AA’ because of the terms, participating investors and the overall recapitalization structure. It is a ‘down round’, but given the economic conditions at the time of the previous round (March 2006) and the current financial climate, we’re very happy with such a very strong vote of confidence from our investors.

Sharpcast offers file-syncing through its SugrarSync service, which syncs data across multiple devices (PCs, Macs, iPhones, Windows Mobile phones) and the cloud. For instance, using its iPhone app a user is able to view all the photos on her desktop if they are in a SugarSync folder.

Syncing is becoming a serious technology trend as people split up their digital lives across devices and the Web. It is one of the promises of Windows Live Mesh from Microsoft, which won the Crunchie for best technology innovation. Apple offers syncing through its MobileMe service. Startups like Sharpcast and Dropbox are looking to carve out their own niche here with both free and subscription services.

Sharpcast’s SugarSync is a subscription service, with prices ranging from $25 to $250 a year. The vast majority of the 20,000 people who have signed up since launch last March are paying $50 a year. Using back-of-the-envelope math, at $50 per user, that implies a $1 million run-rate. CEO Laura Yecies tells me she will use the $10 million to ramp up marketing and keep developing the product.

Yecies is going up against both Apple and Microsoft here. I asked if that worries her. She responds:

With MobileMe it is a very Apple centric solution, but not effective for people who are cross-platform. Live Mesh is still much more talk than actual software, but it will probably be more Microsoft-centric. We have a solution that is actually working now. Those companies have not been successful from a technical point of view. I don’t grant them automatic success.

Trust me, both Microsoft and Apple will figure this out. In the meantime, Sharpcast can build a nice little business and maybe get acquired.