Richrelevance designs personalized recommendation software used by companies such as Sears, KMart, Michigan Bulb Co., and Bestbuyeyeglasses.com.  As a matter of fact, Amazon.com said that they saw a 25% profit increase based on personalized recommendations.  In an SEC filing it has been revealed that Richrelevance has raised $12.5 million in additional funding.  Currently it is unclear whether this is a new round of funding or an add-on to the previous round.

The previous round was Series C at $9 million, led by DFJ with contributions from Greylock Partners, Tugboat Ventures, and several others.  Interestingly, the last time I wrote about a combined investment between Tugboat and Greylock, the Cuil search engine was involved.  That search engine was quickly hyped up and forgotten about despite a $200 million valuation.  Hopefully Greylock and Tugboat have better luck in this investment.

Richrelevance’s first couple rounds of funding amounted to $9 million in total funding.  That investment was also provided by Greylock, DFJ, and Tugboat.  The company has an office in Seattle and hired former Amazon.com Principal Engineer Darren Vengroff to run the company.  In the past year, Richrelevance said that they have tripled their revenues and has plans to further expand.

Cuil received a ton of press when it first launched.  As soon as people started tinkering around with it, a ton of negative reviews were published.  Tyler Hall, a developer at Yahoo! was able to replicate Cuil using Yahoo! Boss and the Google App Engine.  He called it Yuil, but later took it down.

Investors somehow believe that Cuil was worth $200 million when they put money into the company.  Cuil raised about $33 million in funding from several investors.  What possibly drove Cuil’s high valuation is it’s confidence in challenging Google.  Google is the most powerful search engine company on the map today and they are worth $140 billion. 

It seems like that any search engine that believes they can challenge them will get funding and a high valuation.  And Cuil used the same strategy as Powerset to get funding: building the hype.  Cuil claimed that they index more links than Google, but they struggle to find results as accurately.  

Powerset claimed to have better search technology than Google.  So they raised $20.5 million and was acquired by Microsoft for $100 million.  The only product that Powerset launched was a Wikipedia search solution before the acquisition.  Microsoft plans to integrate Powerset into Windows Live down the line.

To shake things up further, Cuil’s VP of Product Louis Monier resigned from the company.  Building the hype usually works against the founders of a start-up because it puts more pressure on them.  More pressure means more stress and more stress leads to less of a desire to stay with a company.

Matt Marshall of VentureBeat wrote an interesting article about how Cuil may have a hard time finding an acquisition with such a high valuation.  Cuil needs to do something drastic to prove that they are a worthy adversary of the big 3 search engines out there.

“We are trying to shake things up and find new ways to help people,” stated Anna Patterson, co-founder of Cuil.

Cuil is a new search engine that officially launched last night.  Cuil boasts over 120 billion links to websites.  This is very comparable to the size of Google’s index as well.  Cuil was founded by Tom Costello, Anna Patterson, and Russell Power.  Patterson and Power both worked for Google prior to starting up Cuil.

Cuil’s strength is that they can index websites faster and cheaper than Google.  Cuil has raised about $33 million in two rounds of funding from Greylock, Tugboat Ventures, and Madrone Capital Partners [Crunchbase].  Cuil has about 10-15 employees based out of Menlo Park, Calif.

Another strength of Cuil is that there are categories that appear on the right side-bar when common keywords are plugged in.  Below is a screen shot:

If I search for my own name, lots of results appear.  But if I search for “Michigan” or “California,” no results currently appear.  This indicates that Cuil has a while to go before indexing everything correctly.  I can honestly say that I’ve been more impressed with Cuil than any other Google, Yahoo!, MSN, Live, and Ask.com alternative so far.

Update: Here is the official press release

Related Links:
1. TechCrunch
2. L.A. Times
3. Techmeme Discussion