Digg gets more cash, $8.5 million

So now you know why they did the big redesign, added video and all those fancy new features. Digg has raised another $8.5 million in new funding from existing VCs, Greylock Ventures and Omidyar Network. The company, previously had raised close to $3 million from these two firms, and Marc Andreessen, co-founder of Ning and Netscape.

Kevin Rose and Micki Krimmel

Hopefully this money will be spent wisely, to grow the business into a profitable entity. After all, Greylock’s David Sze, one of the backers of Digg, tells Venturebeat that Digg is not going to be sold anytime soon, and instead will partner with others who want to incorporate Digg-features in their offerings.

If not selling out the company to someone bigger, then the only other exit option for Sze and other investors is to go public. In other words, Digg will have to grow its sales rapidly, become profitable, and go public.

But then…..

“Our board and investors did not want us to focus, at any time, on monetization at this stage,” said CEO Jay Adelson. “Our focus has been on user growth.”

Digg, certainly has its work cut out. There has been growing negativity enveloping the San Francisco-based start-up. There have been stories of Digg gaming, spamming, and doubts about their pageviews. As Digg grows up, both in popularity and as a company, it is becoming the focus of relentless scrutiny.

Photo via Zooomr by Thomas Hawk