ClusterFlunk raises $1M round led by Lightbank, opens Chicago office
Earlier this year, ClusterFlunk expanded its platform to more than 50 universities across the country. Now the company is growing its investor connections across state lines to the Windy City. The Iowa City-based startup announced Tuesday it closed a $1 million round of funding led by Chicago-based venture capital firm Lightbank. Local early-stage fund, Built
The Iowa City-based startup announced Tuesday it closed a $1 million round of funding led by Chicago-based venture capital firm Lightbank. Local early-stage fund, Built by Iowa, also contributed to the round.
“We’re really excited to work with Lightbank,” ClusterFlunk co-founder AJ Nelson told SPN. “They’re a really hands-on firm, really capture our vision and see the potential ClusterFlunk has. So we’re definitely a good match in that respect.”
In fact, Nelson says it was Lightbank that reached out to he and co-founder Joe Dallago about working with them on their company, which serves as a virtual meeting place for college students to collaborate on assignments and prepare for exams. While Lightbank has invested in Omaha’s SkyVu Entertainment, this is the first investment it has made in Iowa.
“We were impressed by ClusterFlunk’s fantastic founders, the huge market opportunity and their terrific traction in an area under-served by Silicon Valley VC’s market,” Paul Lee, general partner at Lightbank, told SPN.
He added that ClusterFlunk successfully meets the everyday needs of their customers—students—through everything from building community to creating relevant content.
With this latest round of funding, Nelson says ClusterFlunk also will be opening an office in Chicago, housed within Lightbank’s downtown space—though Nelson is quick to stress they will be staying close to their Iowa roots.
“The biggest portion of this round is building out the team,” Nelson (right) said. “Joe and I quickly realized a team of two full-time people definitely has limited capabilities, and we’re just at the point now where we’ve both reached our maximum potential for work and output, so we need to continue adding excellent people to our team.”
Nelson says the pair hopes to hire on developers as well as business and marketing personnel.
This isn’t the first round of capital ClusterFlunk has raised; last July, the startup raised $100,000 of seed funding from local investors like Dwolla’s Ben Milne and Hatchling’s Brad Dwyer.
Over the last six months, Nelson and Dallago worked to scale their company and bring their platform to college students around the country.
“So this last semester was definitely a big learning experience. It was a big scale with just two people,” Nelson said of ClusterFlunk’s January expansion. “We ended up with around 15 schools, give or take, that matched or had better traction than we’ve seen at the University of Iowa.”
By the end of the semester, Nelson says ClusterFlunk was seeing three out of four of its University of Iowa users returning to the site every month.
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