After Weathering First-Year Challenges, KidZui Launches a ‘YouTube for Kids’

8/5/09Follow @bvbigelow

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their own companies, with Vignisson serving as their “fractional CTO” and Broadhead as their “fractional CFO” while Boro served as chairman on the “embryonic boards” of such online startups as VideoEgg and mSnap, a mobile text-messaging advertising network that was acquired earlier this year by Irvine, CA-based SmartReply. (Terms were not disclosed.)

The three CVT partners’ decision to form their own business was sparked by the frustration that Vignisson and his wife Shabana felt when they couldn’t find a safe and easy way for their three children to use the Internet. Boro, Vignisson, and Tom Broadhead founded KidZui in 2006, targeting children from 3 to 13, and funded early development with about $500,000 from CVT. Altogether, Boro says KidZui has raised a total of almost $12 million in venture funding from Emergence Capital Partners, First Round Capital, and Maveron, the venture capital firm led by Starbucks chief executive Howard Schultz and former investment banker Dan Levitan. Boro says Scholastic, the children’s book publisher, also has made an undisclosed investment in the startup.

KidZui has used the capital to improve its software, expand its services through offerings like ZuiTube and develop partnerships with ComCast and Scholastic. A spokeswoman says more deals are in the pipeline.

According to Boro, KidZui is now in less than a half-million U.S. homes, out of a market that he estimates is close to 15 million homes with kids in the target age range. He says the children use KidZui an average of four times a week, visiting an average of 40 sites.

Today the company’s headcount has crept back up to 25. “Obviously, we’re still not profitable,” Boro says, “but we’ve reduced our costs so that profitability is within our sight.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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