Gather Raises $2.4 Million, Makes Demand Media-Esque Pivot

Social news site Gather has raised another $2.4 million in funding this week, in order to pivot its core business and focus on being a content on demand platform for other publishers, like Demand Media. Gather currently allows to writers to submit content and generate ad revenue share based on pageviews and site engagement.

Gather CEO Tom Gerace tells TechCrunch that while reached 7 million monthly unique vistors in the past 12 months (a 700% increase) the funding will actually be used to form an entirely new parent company which will include Gather. Gerace plans on taking the platform built by Gather for automating writer workflow and determining author success and offering it out to other web properties and companies like Pampers.

Despite our and others criticism of Gather for its poor design and specious business model back in 2006, the company seems to be holding strong. Gerace tells us that they’ve got four potential white-label clients in the pipeline but won’t reveal which ones or what the new umbrella company will be called. Gerace will also be using the latest financing to expand the company from 26 employees to “about 60 or 70 folks.”

Investors in the Series E round included Lotus founder Jim Manzi, VC group Allen & Co and new entrants Progress Ventures and Nick McShane.