Social Media Tools Provider Lithium Raises $18M

Lithium Technologies, a privately held provider of social networking and online community-building software, has raised $18 million in its third round of funding.

New investors included DAG Ventures and Tenaya Capital, which joined existing investors Benchmark Capital, Emergence Capital and Shasta Ventures.

"The additional funding and venture partnerships will provide us with a tremendous lift into 2010," said Lyle Fong, founder and CEO of Lithium Technologies. "We will now use these resources and momentum to be even more aggressive."

Founded in 2001, Lithium's clients include AT&T, Best Buy, PayPal, Research In Motion Limited, Sony, and Univision.

In recent years, the rise of social networks has driven demand for -- and investment in -- related platforms and software providers.

In mid-2008, for example, Lithium rival Mzinga raised nearly $30 million, and soon after announced the acquisition of another rival, Prospero.

Also in mid-2008, new media holding company Demand Media acquired another Lithium rival, Pluck, for a reported $75 million in cash. Pluck is an amorphous startup, which succeeded in positioning itself as a provider of white-label social networking tools for enterprise clients like USA Today.

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Demand Media, which was founded by former MySpace CEO Richard Rosenblatt, has kept busy buying up content sites and other new media companies over the past few years, and had a reported $320 million on the books in early 2008.

This past June, Emeryville, California-based Lithium acquired San Francisco-based Keibi Technologies, a developer of platforms that allow online communities to monitor the appropriateness of user-generated content. Terms of the deal were not disclosed.

Other rivals in the crowded space include Leverage, LiveWorld, and Networked Insights.

In June 2008, Lithium closed its second round of financing, worth some $12 million.

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