Aggregate Knowledge raises $20M, to boost sales on Web sites

Aggregate Knowledge, which tracks Internet user surfing patterns within a site in order to sell them more, has raised $20 million in venture capital, as expected.

We reported about Aggregate Knowledge’s progress in February, including early details of this round. Venture capitalists valued the company higher than $70 million (post-investment), the company’s chief executive Paul Martino confirmed. DAG Ventures led the round, and was joined by Kleiner Perkins. Martino, an affable fast-talker, also co-founded social networking company Tribe.net. Unlike that company, which struggled, Aggregate Knowledge is making millions of dollars after less than two years of business. It serves 15 customers, including Overstock and Washington Post.

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It works by offering products, news content or other material to users based on what previous users expressing similar behavior have chosen to buy or read. Competing start-ups like Wunderloop and Baynote pursue similar strategies (see VB coverage of Wunderloop and Baynote). Aggregate’s Martino says he is targeting industry leader Omniture, a public company that bought Touch Clarity just as Aggregate Knowledge was closing its venture round several weeks ago. Omniture uses both Web analytics and behavioral targeting — and that’s where Aggregate Knowledge also wants to go, said Martino. Unlike Omniture, he said, Aggregate Knowledge has negotiated the right to use customer data across sites. So if you’re reading an article about a baseball game on one site, AK can recommend a ticket from another site.

Leading the round is DAG Ventures, which has become known as “coattail ventures” because it loyally invests in companies already backed by successful firms like Kleiner Perkins, Sequoia and Benchmark. Kleiner Perkins led AK’s first round. The latest round brings total investment in AK to $25 million.

Wunderloop, of Germany, recently unveiled its WunderLOOP’s Connect, a behaviorally targeted online advertising exchange. It allows publishers and advertisers to access user profiles to maximize ad targeting possibilities.