Yammer pulls down $85 million in venture funding

Start-up offering social media tools for businesses now has raised $142 million


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Investor interest in social networking is spreading beyond consumer-oriented services such as Facebook and Twitter to start-ups targeting the social networking needs of businesses.

The latest beneficiary of this trend is Yammer, a San Francisco-based company started in September 2008 by former PayPal chief operating officer David Sacks.

Yammer just landed a huge $85 million round of venture funding, the Wall Street Journal reported, which, added to the four previous funding rounds, gives the company a total of $142 million in private capital.

The latest round was led by DFJ Growth, which was joined by previous investors Charles River Ventures and Founders Fund, along with newcomers Capricorn Investment Group, Khosla Ventures and Meritech Capital Partners.

Yammer announced in mid-January that it has exceeded 4 million corporate users of its enterprise social networks and tripled year-over-year sales.

The company claims that more than 85% of the Fortune 500 now have Yammer networks, including Thomson Reuters, Shell, Chevron, Nationwide and Ford Motor.

Companies such as Yammer and Jive serve the needs of large enterprises that want to leverage the power of social networking via content sharing, collaboration and customer interaction, but in a secure, manageable environment.

Yammer's business model is freemium-based. There's a bare-bones free service that offers only basic enterprise social networking and mobile access.

For $5 per month per user, customers get the above plus basic admin controls, basic support and services and integration with existing systems.

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