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Since its launch, Ello, dubbed the “anti-Facebook” app and with its initial 90 users, quickly gained publicity and has now come to have a large number of adherents. However, on Thursday, the fast-growing app has vowed to take its anti-Facebook ethos even more seriously after receiving $5.5 million in new funding.
Ello has promised its users that it will never accept to make money by selling user data or ads and announced on Thursday that it had converted to a state of Delaware Public Benefit Corporation. Consequently, Ello commits to represent a material, positive impact on society as well as on the environment. Benefits corporations are legally binding business structures in some states, and as such, Ello must make decisions based not only on potential revenue for shareholders and investors but also on employees, the environment and the community.
This major funding opportunity (granted, Ello had garnered a seed investment in March, of $435,000) was led by Foundry Group, Techstar’s Bullet Time Ventures and FreshTracks Capital. These inventors joined Paul Budnitz, Ello CEO and co-founder, in signing onto the company, promising that it will remain ad-free and public-benefit-driven in the future.
“We’ll either build a business that doesn’t rely on third-party advertising or the selling of user data or we won’t build a business. “
Seth Levine, managing director at the Foundry Group said about Ello.
Facebook had a direct contribution to Ello’s boost this September, when it announced that drag-queen users were mandated to use their legal names as opposed to their nicknames (such as “Lil Miss Hot” or “Sister Roma”). The announcement caused such an outrage in the lesbian, gay, bisexual, transgender and queer community, which had been announced that their accounts would be disabled if they wouldn’t conform to these new requirements, that an immense number of users moved their profiles from Facebook to Ello.
Eventually, Facebook did apologize to its drag-queen users, saying that “authentic names used in real life” could be used for their profiles rather than their legal names, however, by then the harm had been done and Ello had gained widespread notice. It’s this that made Ello known as the “anti-Facebook” (as the About page also announces that Ello views collecting and selling user’s personal data for profit as creepy).
Ello started out as an invite-only, private social network. Today, however, it sees as many as 45,000 invite requests per hour (and would-be users wanting to enter the network but not having any friends on it, can simply request an invitation by submitting their email through the company’s website).
“The Internet is turning into one giant billboard, and with essentially all social networks relying on advertising, data mining, and selling user data, it can be hard for some people to imagine a better way,”
Budnitz said.
