Wednesday, September 24, 2008

Local VCs in on Digg’s $29M third funding round

By Mass High Tech Staff

Highland Capital Partners has led a $28.7 million Series C round of funding for Digg Inc., a San Francisco-based social news website, according to company officials.

Lexington-based Highland Capital was joined in the funding by previous Digg investors Greylock Partners, which operates an office in Waltham, Omidyar Network and SVB Capital, both based in California.

As a part of the deal, Richard de Silva, a partner at Highland Capital, will join Digg’s board of directors, officials said.

The funding news comes along with a corporate expansion program, including the doubling of Digg’s staff, a move to a larger corporate headquarters and international expansion. Traffic to the website has doubled during the last year to more than 30 million unique visitors monthly, and advertising revenue has nearly tripled during the last 12 months, officials said.

Digg raised a $2.8 million Series A round of funding in October 2005 and a $8.5 million Series B round in December 2006, officials said.

Highland Capital, founded in 1988, has invested in nearly 200 companies. In 2006, the firm closed its seventh fund, which totaled $808 million. Last year, it closed a $300 million fund targeting consumer-focused investments.

During 2007, Highland Capital was ranked third among New England’s most active venture capital firms, completing 34 deals, according to Dow Jones VentureSource.

The firm has been the lead investor in online media and Internet companies such as Ask.com, Lycos, MapQuest, Quigo and VistaPrint.