Online media startup Glam Media Inc. raised $84.6 million in a Series D funding round to help it roll up additional content sites and expand an ambitious publishing model that combines elements of a portal and advertising network.

The Brisbane, Calif., company, which said its expects this round to be its final, turned to German publishing giant Hubert Burda Media Holding GmbH & Co. as lead investor in the deal, joining London-based hedge fund GLG Partners LP and previous investor Duff Ackerman & Goodrich LLC of San Francisco. Other previous investors include Accel Partners of Palo Alto, Calif., Draper Fisher Jurvetson of Menlo Park, Calif., and Walden Ventures Capital of San Francisco also participated, bringing the total equity investment in the round to $64.6 million.

Hercules Technology Growth Capital Inc. of Palo Alto put up an additional $20 million in debt financing. 
Glam founder and CEO Samir Arora said the company targeted the round at about $50 million in equity and $10 million in debt; it raised the ceiling based on investors' appetites. Arora confirmed that its bankers had circulated documents informally last summer for a round of as much as $200 million, but Accel Partners' general partner, Theresia Ranzetta, said that Glam's board never approved a sum of that size, and the company began official fundraising in September for the more modest amount.

Although Glam would not disclose pricing on the new investment, a source close to deal put the post-money valuation at close to $500 million, and Arora said the round was sized based on the company's needs.

"We had announced earlier that we would be very close to Ebitda profits this quarter, and we don't need a lot of working capital for the core business, but we felt that we should use the fact that we are No. 1 in global reach to women to grow the company globally and to add technology in display advertising and ad serving," Arora said. "Those two will be the priorities, but we also may do some M&A of core content companies and advertising networks."

Glam claims to be the leading online publisher of content for women, with 44 million global unique monthly visitors according to comScore MediaMetrix, but some commentators have criticized the claim because unlike the other leading women's content publisher, iVillage, a subsidiary of New York-based NBC Universal Inc., it claims the traffic of participants in its advertising network.

The company operates an ad network that syndicates content and resells ads for independent women's blogs that agree to share revenue and sign over their comScore traffic to Glam Media, which some have criticized as merely a search engine optimization (SEO) gimmick to trick advertisers.

The distinction is increasingly irrelevant, however, as models for online publishing evolve, and Glam investors believe the company has hit on a particularly attractive model that has fueled rapid growth.

"Samir is a genius, and Glam is redefining media," said Tim Draper, managing partner of Draper Fisher Jurvetson, in an e-mail interview. "The idea of consolidating all the media sources around women is brilliant."

Draper said Glam's combination of allowing bloggers to monetize content and offering advertisers a dominant avenue to high-end women consumers provides it a unique position in the industry, and that Burda's investment is a validation of the model.

Arora said the company was looking to add a strategic investor in the deal, and that as a $2.4 billion international media group and leader among traditional women's content publishers in Germany and other European markets, Burda will provide key strategic contacts as well as content.

Arora said the company's business model aims for a balance of internal content and content from partners similar to Mountain View, Calif.-based Google Inc.'s 35%-65% split. The company will work to maintain this "steady state" balance as it grows, he added, and that may require aggressive acquisitions of current partners as traffic with new partners increases.

"I don't believe we need to be a content company to be a media company, and I don't want to get into bad habits," Arora said. "But I believe you should fund companies in high-growth mode, and there are two types of deals; fear of competition deals, and revenue and Ebitda deals--and I am a firm believer in both."

Arora said Glam is unlikely to raise additional private equity, but it expects to expand its debt facility to $50 million or more to finance additional growth as revenues grow. He said the company is not seeking a quick exit in the public markets, adding that he did not anticipate taking the company public at least until it reaches a critical mass in two or three years.

In putting the investment round together, Glam worked with bankers Jim McVeigh and Ed Chiang of Banc of America Securities LLC and John Griffen of Allen & Co., all of New York, and with Emmanuel DeSousa of Deutsche Bank Securites Inc. in Menlo Park. For legal work, Glam hired deal from Alan Kalin of Bingham McCutchen LLP in Palo Alto. -- Clifford Carlsen