Evernote has raised yet another funding round; US$70 million on top of the US$96 million that it previously raised in several rounds. CEO Phil Libin has confirmed that the funding puts Evernote at a US$1 billion valuation, as he prepares the company for an initial public offering (IPO).
In a blog post announcing the funding, Libin reiterated his goal to build a "hundred-year start-up that can be everyone's second brain". He said that the funding will be used for expansion, acquisitions, increasing the pace of product improvements and international expansion. It's "not because we need the money to fund operations", he wrote. (Click here for the official news release.)
Lead investors in this new round are Meritech Capital and CBC Capital. The CBC relationship is particularly important for Evernote's international ambition, as that firm typically invests in Chinese companies.
Evernote is one of the rare start-ups that have found success with the freemium model. The note-taking, web-clipping and image-storing service (and apps) is free to use and provide a lot of utility. Evernote's up-sell to the paid service, which gets you more bandwidth and improved features on the apps, is relatively subtle. Evernote does keep its users for years, and over time they convert to paid at increasing rates. Even so, of Evernote's 25 million users, only 1 million pay.
Hence the company's drive to build or buy new products that will funnel users into the Evernote ecosystem. Recently, the company acquired the Australian-born graphics utility Skitch, and rolled out Food, Hello and Clearly, all specialised applications that feed data into users' Evernote accounts.