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Wix, a two-year-old company that makes tools to help individuals and small businesses build sophisticated Web sites cheaply and quickly, has raised $3.5 million in a Series B funding round led by led by Mangrove Venture Capital of Luxembourg (best known as an early investor in Skype). Allon Bloch, co-founder of Wix, says the startup got in just under the wire, as venture capitalists grow risk-averse amid the deepening financial crisis."We were fairly lucky," he says, noting that the funding environment "over the past three or four weeks has deteriorated
fairly quickly. We definitely felt a change." Although none of Wix's invesors in the latest round backed out of funding commitments, "Many of the ones that were interested in Wix were happy to veer off to the sidelines," Bloch adds. The other participant in the round is Bessemer Venture Partners, which last year led a $3.5 million Series A investment in Wix. The startup previously raised $1.2 million in angel funding. Wix, which has to date only had a soft product launch and generates minimal revenues, is officially launching its product this week. "I wouldn't want to be out there fund raising just now," Bloch adds. "I expect many venture firms will back out of deals." He does, however, expect Wix to eventually need another dose of funding. "We will probably raise another $5 million in a year, year and a half," he says. Wix falls into that risky space of startups that show promise, but that lack any track record. The company says the market for its products is substantial, given that the current process for building Web sites is what Bloch calls a "hair pulling process." He says that the tools provided by Wix, which competes with other Web site design services, such as Freewebs, will help more people and small businesses launch the sort of slick Web sites that they previously did not have the resources to produce. Asked how Wix would use the new capital, Bloch jokes that he plans to conserve it, before saying more seriously that the company must prove it can function as a business before raising more capital. "We are being conservative," he says. "We are not assuming we will ever be able to raise venture capital again, unless we prove our model." - Andrea Orr
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