Virtual Stock-Picking Site Gets Real Money

by Ken Schachter on 08 September 2008, 11:20

Categories: Archives - General news - Media - Internet - Finance
Topics: caps , DCM , Union Square Ventures , UpDown.com , Covestor , Wikinvest , Motley Fool , cakefinancial , KPG Ventures

 
UpDown.com, a social-networking site that pays canny investors who can beat the market, has landed $1 million in angel funding, the company said Monday.

The cash infusion by previous angel investor Joachim Schoss, an entrepreneur who sold Scout24 to T-Online for $221 million in 2004, brings total funding of UpDown.com to $2.2 million.

UpDown.com competes with a fistful of online sites where investors can share ideas, including cakefinancial.com(backed by KPG Ventures), wikinvest.com (financed by DCM, an investor in Red Herring), covestor.com (funded by Union Square Ventures). Other sites also have added social-investing components as Motley Fool has done with its CAPS site. UpDown’s twist is that  users who beat the S&P 500 with their $1 million virtual grubstake win real money.

The 2-year-old company based in Cambridge, Massachusetts, was founded by a trio of current and former Harvard students and claims more than 70,000 registered users. UpDown.com’s business plan calls for advertising support to provide revenue.