KidZui Caps Significant Progress in Difficult Year with $4M in Fresh Funding

3/25/10Follow @bvbigelow

KidZui’s founding chairman and CEO Cliff Boro called me from the airport last night to confirm recent reports saying that the San Diego startup, which has been developing a kid-friendly Internet browser, has raised $4 million in additional venture funding.

The four-year-old startup launched its KidZui browser (which is a Firefox add-on) in 2008, and Boro says KidZui now has more than 1 million registered users. The browser gives kids an authentic Internet experience by allowing them to surf hundreds of thousands of websites, watch online videos, and play games. It’s just that all of the content has been screened and approved by KidZui’s editorial team. But as the CEO explained to me last summer, it’s a tough market with already-established and well-funded rivals like PBSkids, Webkinz, Nickelodeon, and Club Penguin.

San Diego’s Mission Ventures led the $4 million round, and Boro tells me that Mission’s managing partner, Leo Spiegel, has joined KidZui’s board. KidZui previously raised almost $12 from Emergence Capital Partners, First Round Capital, Maveron, and other investors—and Boro says the VCs also joined in the latest round.

“We plan to use the funding for general working capital, and continue to work on making our product better and on expanding our partnerships,” Boro says.

The company recently arranged some high-profile partnerships. Under a deal with Best Buy, for example, the consumer electronics retailer now offers to load the KidZui browser as part of its software installation service. Through a new partnership with DreamWorks, KidZui is integrating the lead character from the animated movie “How to Train Your Dragon” in its social networking experience as part of an integrated sponsorship.

Boro says KidZui has increased its audience by 300 percent over the past year, “and spent less than $10,000 on marketing.”

Still, it hasn’t been an entirely smooth ride since last August. At that time, Boro told me he had reduced KidZui’s headcount to 25 staffers from 30. He’s laid off more workers since then, and KidZui now has 15 employees. “We definitely cut expenses last year and are running pretty lean,” Boro says. “We’ve made significant progress in a difficult year.”

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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