Xobni raises $7M to battle Outlook’s email overload

Xobni, a plug-in that tries to improve email organization in Microsoft Outlook, has raised $7 million in a second round of venture financing.

Xobni’s most prominent feature is an inbox sidebar that shows profiles of people you’re corresponding with. By making related content (phone numbers, past messages, files exchanged, and more) immediately accessible, Xobni helps you avoid fruitless or time-consuming searches through giant piles of email; Microsoft founder Bill Gates (somewhat hyperbolically) called it “the next generation of social networking.” Xobni also makes it easier for other web services to interact with Outlook, including Yahoo Mail, LinkedIn, and Facebook. I believe VentureBeat Editor Matt Marshall is the only Outlook user on our team, but he praised Xobni for improving his email efficiency.

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The San Francisco startup faces plenty of new competition. For example, I’ve been impressed with Postbox, another startup that wants to tackle email overload. A German Outlook plug-in called Lookeen even brags about being a better search tool than Xobni. But that alone should tell you that Xobni is making a big splash — it’s been downloaded 1.5 million times. One of the company’s goals for 2009 is moving into bigger, “enterprise”- level companies. The fact that Cisco joined the new round is certainly a vote of confidence in this direction.

Xobni, which was incubated by Y Combinator, previously raised a $4.26 million first round. Prior investors Khosla Ventures, First Round Capital, Baseline Ventures and Atomico participated in this round too.