paidContent - Mobile Search Startup ChaCha Raises Another $4 Million

This story was written by Joseph Tartakoff.
Mobile search firm ChaCha has raised $4 million of a $5 million round, according to an SEC filing. We’ve reached out to the company to get more information about what it intends to do with the new cash, although $2 million of the round is being used to pay back a loan from Citigroup.

In March, ChaCha raised $12 million in a round—which it said it would use to expand its sales activities and to open a New York office. At the same time, it said it was cutting expenses and laying off 25 employees to “preserve its cash.” That round was initially supposed to be as large as $30 million. ChaCha also raised $16 million in 2007 from investors, including Amazon.com (NSDQ: AMZN) CEO Jeff Bezos and former Compaq CEO Rob Canion.

With ChaCha’s free service, users call or text message with a query and receive an answer shortly afterwards. The company initially let people communicate with a human guide while searching online but it switched strategies in early 2008, moving into the mobile space.

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By Joseph Tartakoff