Feeligo, whose goal is to essentially become the “Google AdSense of the social web”, has announced today that they closed on a €250k seed round with Petit Poucet Participation and a group of successful web entrepreneurs. This seed investment caps off a strong first year for Feeligo, which was founded by business-tech duo Jonathan Levy-Bencheton and Davide Bonapersona. Their solution, which is an application for (or plug-in to) the main social network development platforms (e.g. Social Engine and Buddy Press), is now available on 50+ specialized social networks around the globe. Focusing first on the social network platforms, which have multiplied in recent years, has proven to be a smart strategic move by Feeligo which has put them on the path to leadership in this rapidly growing space.
Feeligo aims to tap into the massive social network opportunity by enabling social networks to monetize their communities through exchange and/or sales of virtual items. According to co-founder Levy-Bencheton, social networks are actually following a similar development path to that which blogs took several years back. Even with the dominance of Facebook (perhaps because of it), people around the world are deciding to create their own social networks, often focused around interests rather than connecting with friends (e.g. Dogster, Fitocracy, Raptr). Levy-Bencheton reckons that there are at least 1 million social networks around the world that are viable candidates for monetization solutions. Even better, the platforms, which are somewhat like the WordPresses of social network creation, currently have a very limited set of plug-ins available (approximately 500 at last count), so it’s much easier for emerging, smaller players such as Feeligo to rise to the top. In addition to the limited number of plus-ins available, many plug-ins often do not maintain their high level of quality over time. This problem basically comes from the fact that most 3rd party plug-in developers tend not to focus on a single product. Instead they develop many plug-ins (forums, chat, e-commerce, themes…) and sell them individually as one-off purchases. This model makes it both technically harder and economically uninteresting to keep all of their plug-ins up to a high quality standard over time. Obviously, this has the potential to degrade the user’s experience, so there’s definitely a real need for specialized third party developers such as Feeligo who continuously invest in enhancing the quality and range of solutions they offer.
Solving the monetization problem is increasingly becoming more pertinent for social networks, both big and small. As social networks are, in theory, ‘closed’ and many are smaller in size and, consequently more intimate, it makes it traditional approaches to monetization, such as advertising or selling user information, a lot harder to implement. Although Feeligo plans to eventually expand into other types of solutions, they feel that focusing first on virtual items offers a credible and scalable solution to the social network monetization challenge. In addition to monetization, another benefit that they offer both social network platforms and sites alike is analytics. Getting information on users gift exchanges or purchases is invaluable to both platforms as they look to expand their number of social network customers and social networks as they look to improve the experience of their users.
The most important next step for Feeligo is to focus their seed funding and efforts squarely on getting more social networks to install their plug-in. Being a small but highly international team (5 nationalities), should be a real advantage for them as they look to work with even more diverse social networks around the globe. According to Levy-Bencheton, in the long-term they plan to work with brands to create sponsored gifts as well as expand into other types of social network monetization solutions.