SAN FRANCISCO -- Popular image-sharing service Imgur has finished its first round of funding: $40 million from venture capital firm Andreessen Horowitz with a small investment from news website Reddit.
The San Francisco company received a valuation of about $200 million, according to a person familiar with the matter but not authorized to discuss it publicly.
With 130 million visiting the site each month, Imgur -- which the company pronounces as "imager" -- has become one of the Internet's most popular hangouts by capturing the fundamental shift in how people express themselves and communicate on the Internet: through sharing images. Imgur has evolved from a tool to share images to one of the top entertainment destinations on the Web.
Founder and Chief Executive Alan Schaaf said his company had resisted taking outside investment, having been profitable from its start five years ago, despite being hounded by more than a dozen venture capitalists and angel investors. Schaaf said his team decided the time was now right for the funding to speed up growth, develop new products and grow the reach of its service around the globe.
"We have been able to do everything ourselves while making money in the process," said Schaaf, who is fond of pointing out that the only money he ever spent on Imgur was $7 to register the domain name. "Of course, being bootstrapped forces you to move at a certain pace, oftentimes slower than what you want. So we raised money because we want to do more and do it better and we want to do it faster."
Schaaf said his team clicked with Andreessen Horowitz. As part of the investment, Andreessen Horowitz general partner Lars Dalgaard will take a seat on Imgur's board of directors.
Dalgaard called Imgur "a gem of the Internet" for its broad appeal and the addictive quality of the service.
"I wanted to invest at any level I could," he said. "It is unlike anything else on the Internet."
Reddit also contributed to the funding, a nod to Imgur's genesis as a simpler way to share images on Reddit.
Schaaf said plans are already in the works to improve the Imgur experience on Reddit.
"We are super excited to be working closer with them," Schaaf said.