Comparison-shopping startup Retrevo Inc. is announcing Thursday that it has secured an $8 million Series C round from existing investors Alloy Ventures and Norwest Venture Partners. Retrevo's Series A was a seed round of $700,000 from Alloy back in February 2006, and it raised $3.2 million from Alloy and NVP in a B round in  December 2006.

Retrevo goes beyond simple price comparison sites. Using algorithms, the company's software culls reviews on consumer electronics from around the Internet -- including blogs, forums and social networks -- and combines the information with product specifications from user manuals and prices from retailers to create two simple summaries, the overall "value" (based on bang for the buck) and the overall "sentiment" (based on reviews and comments). 

"Nothing is getting easier in consumer electronics," says Matthew Howard, general partner at Norwest Venture Partners. "Even refrigerators have built-in intelligence now. The way vendors protect their gross profit margins is by putting more features into a product."

The beauty of Retrevo, Howard adds, is that it allows the consumer "to amplify or discount attributes of a product that may or may not be important to you." For example, the Apple Inc. iPod is the best known MP3 player, but Retrevo's product adviser lists the Cowon D2 as the top MP3 player by value and overall community sentiment.

Retrevo CEO Vipin Jain argues that the approach is more comprehensive, objective and up-to-date than competing sites that rely on reviews. "Old-school publishers like CNET [CNET] are very attitude-driven and limited in terms of the coverage they can have," he says. "They review only eight to 10 products in a category, versus 800, and they are quickly out of date. Plus, they're still relying on one person's opinion."

Asked how Retrevo compares with social shopping startups -- such as ThisNext Inc., which recently raised a $5 million Series B from existing investors Anthem Venture Partners and Clearstone Ventures Partners, and StyleFeeder, which recently obtained a $2 million Series A from Highland Capital  Partners and Schooner Capital -- Jain responds, "For social shopping to work on a single site, you need to have tens of millions of users. Otherwise, it's not comprehensive." 

Tech Confidential reported in August questions that had been raised about the sustainability of Retrevo's business model. "We were not monetizing the site at that time," Jain explains. "Now we make money two ways: through lead generation -- once we help you find a product, we bring you pricing information from various retailers and if you click through, we get money --  and through branded advertising."

"Our business model is beautiful," Jain continues. "The average family spends more than $1,600 per year on consumer electronics, and we can play a key role in generating leads." - Mary Kathleen Flynn

See January 2007 item from TheDeal.com
See August 2007 post from Tech Confidential