• by Laurie Sullivan  @lauriesullivan, October 13, 2008

Amid chaos in the U.S. financial markets, Wix will announce today that it has introduced a premium version of its Flash-based Web site development kit and secured $3.5 million in funding.

The cash infusion, led by Mangrove Venture Capital--with additional investment by the company's first backer, Bessemer Venture Partners--brings total investments to $8.5 million.

The premium version of the online publishing platform, which costs $9.90 per month, lets the novice create Flash Web sites and content, such as widgets for Facebook. The features are drag and drop, so knowing how to hard code in HTML is not required. The monthly fee keeps the site free from advertising and marketing links, supports 500 megabytes to host content, and enables the Web site designer to connect to another domain. Wix will continue to offer the service for free when users agree to run promotional links on their site.

Think of an ad agency or marketing firm that wants to quickly launch a campaign, or small business, such as a flower store, looking to get noticed. The site makes it easy for brands to quickly whip up a site or a widget to promote parties and events. "If you don't want to work through a designer, the option would be a template-based site that costs you thousands of dollars," said Allon Bloch, Wix co-CEO. "We have templates, but you can change them. And that was the most ambitious part in creating this new application."

The technology makes the templates interchangeable, allowing photos, videos, animation and text to behave as if they are dragged from the same environment onto the Web page to create one document. The online publishing platform supports the Flash sites, but creates a duplicate that pulls out the text, allowing search engines to crawl through as if they were built in HTML.

The technology, in part, attracted investors to infuse a little cash. Although the decision was made months ago to make the investment, "we could have stopped the investment, but didn't," said Adam Fisher, partner at Bessemer Venture Partners. "I think you will see a major slowdown in the fourth quarter--far fewer companies financed, and those that do ... will receive much less."

Securing funding means that companies will need to prove capital efficiencies. Those that don't require a lot of capital to reach cash flow break even, or companies already profitable but looking to invest in further growth and development will have a better chance, Fisher said. Capital-intensive companies requiring extensive engineering or operational teams will fall out of favor.

Since the Wix moved launched as a beta site in June 2008, the company has added a few hundred thousand users--2,000 to 3,000 daily.