How much should you pay for a used iPhone, TV, or bicycle? Spark Capital, Andreessen Horowitz, SV Angel and more think you need to know, so they've invested $1.5 million into Priceonomics, a Y Combinator winter 2012 startup. The seed round that shall be announced later today (Update: here it is) will go towards hiring front-end developers and back-end engineers to make the site beautiful but simple and beef up its machine learning technology.
The site saw 250,000 page views in March and is still growing traffic by a brisk 65% every month. Investors see gold in possible business models built around the data Priceonomics crawls and ads shown to people about to make a purchase. Co-founder Rohin Dhar says the startup aims to beat general search engines by immediately knowing you're looking to buy when you type in the name or maker of a laptop, appliance, camera, or stereo.
Priceonomics is building a smart, curated catalog of all the products ever made, as I wrote when I broke the news of the startup's launch in December. It identifies an item, and then crawls the web looking for every price it's being sold at second-hand. It then gives you a suggested price you should be willing to pay, plus an acceptable range and how the price has changed over time. It then links to eBay, Craigslist, and other places where you can buy the product.
Once Priceonomics pitched at Y Combinator Demo Day a month ago and we named it one of the best of the class, it only took 10 days to close the round. Andreessen Horowitz and SV Angel helped power the $150,000 start fund that Y Combinator companies get, and are now doubling down on Priceonomics. Other new institutional investors beyond Spark Capital are CrunchFund (ran by former TechCrunch editor Michael Arrington), Crosslink Capital, Blazer Ventures, Open Network Lab, Ace & Company, Start Fund, and Y Combinator.
YC partners Sam Altman, Garry Tan, Harj Taggar, and Alexis Ohanian as well as early Google engineers Vijay Boyapati, Mike Curtiss, Steve Baker, and Brian Larson are in on the round. Finally, angels Joshua Schachter (founder of delicious.com), Irene Pedraza / David Villeger (founders of CheetahMail), Matt Humphrey (cofounder of homerun.com) Michael Ovitz (founder of CAA), Erik Moore, Tim Fong, Klaus Wittgenstein, and father/son pair Rick Merrill & Rick Merrill are investing. Dhar says "YC worked so hard to make sure all the investors were at Demo Day, and helped us connect with them in a fundraising environment" a much less awkward experience than startups and investors cold-emailing each other.
Competitors it will have to fight off include Worth Monkey, but that tool's just a search engine. It doesn't offer intelligently organized price guides. Priceonomics may also end up butting heads with Carsabi, a fellow YC company that specializes in used car discovery.
While indexing first-hand products "is on our radar" Dhar tells me, "right now we're focused just on second-hand stuff because there doesn't exist any fair pricing there." It's true. Trying to Google for a "used iPhone" brings up a jumble of links to different models and prices, and you can't be sure if you're missing a deal. Priceonomics makes you confident you're not going to get ripped off.
Check out the unique blog post Priceonomics put up about the funding, which includes a call for engineers to apply for jobs, and advice for other startups trying to raise money.