ChaCha Dances on to Potential Profit with $7M Series E

ChaCha’s CEO, serial entrepreneur Scott Jones, today told the Wall Street Journal “don’t be afraid to fall fast.” That might as well be the mantra of ChaCha, the mobile text search company launched in 2006 which has failed fast, and taken in a lot of money to support trying new things over the past half decade. It looks like ChaCha, led by Jones’ fearlessness, might finally prove that the company’s unique and updated business model can pay off.

While Google had 100% of the market share at the time ChaCha launched, the Carmel-based company set out to have real-time assistance from human guides answer search questions. With $6.5 million in VC, ChaCha ramped up fast, failed quick, and in 2008 reinvented itself as a mobile question-and-answer service.

The company claims to be on the verge of a profit, convincing VCs there’s another dance left in ChaCha’s ballroom. The company announced today that it received $7 million in new funding from anonymous lenders, bringing the company’s total funding to $69 million.

ChaCha’s mobile text service is second only to Twitter in growth rate of the Top 5 mobile text publishers. What’s more impressive is that this past quarter, ChaCha actually passed Google as the biggest source of SMS text search queries. And ChaCha also has earned the title online of “fastest-growing website in 2009” according to Quantcast. The company makes money by selling ads with its answers. VentureBeat hits on a key problem for ChaCha’s growth in the future — “(the company’s) biggest hurdle may be getting the grownups to realize it exists,” since the site is huge among teens and young adults (up 191% in 2009.)