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An Iowa City-based startup will announce today that it has raised $1 million from a Chicago-based investment firm headed by two Groupon co-founders.
ClusterFlunk, the brainchild of former University of Iowa students A.J. Nelson and Joe Dallago, will use the money to hire developers and expand the virtual meeting space's reach to more college campuses, while building new features.
ClusterFlunk offers college students an online place to meet and discuss college courses at 15 major universities, including the University of Iowa, Auburn University and the University of Florida.
The company will also open a second office in Chicago near the Lightbank investment firm.
"We are planning to build out a team, first and foremost," Nelson said. "It's a celebration, but (the money) is a means to the end. We have a runway now to go and reach our goals."
Nelson said he and Dallago hope to hire about six people with the money. Co-founders of Lightbank announced in March that Iowa had piqued their interest for potential investment. Groupon co-founders Eric Lefkofsky and Brad Keywell launched Lightbank in 2011.
Lightbank has invested in tech companies for about three years and has more than 70 firms within its portfolio, including a data site acquired by Google and a location-based Q&A site bought by America Online.
General partner Paul Lee said clusterFlunk's metrics have been impressive so far.
"Students have a lack of resources to connect in an easy way online, and current options such as Facebook don't offer the tools necessary to share files and truly engage with classmates," he said in a statement. "ClusterFlunk is changing the way students study, interact and plan on campus."
The investment comes on the heels of an announcement Friday that Des Moines-based Next Level Ventures had invested $4 million in the recruitment firm BirdDog.
Nelson said he hoped the announcement could help the state build some momentum.
"That has always been an underlying goal from Day 1: to get Iowa City and Iowa on the map," he said. "Anything we can do to keep furthering that will only help."
ClusterFlunk is an online place where students meet and use instant messaging, file uploading and note-sharing capabilities to collaborate with classmates.
Prominent Iowa tech startup advocates such as Josh Cramer, Ben Milne and Brad Dwyer have all invested in clusterFlunk in the past.
Iowa-based fund Built by Iowa also invested in the company.