The investors in San Francisco start-up Zivity would prefer to think they are funding the next wave of social networking rather than an online peepshow.

Zivity, which serves up photo-shoots of scantily clad and tastefully nude women for subscribers paying $10 a month, is announcing its second-round funding today and has raised $7m from some prominent venture capitalists.

Founders Fund and BlueRun Ventures are providing the financing for the company founded by Scott Banister and his wife Cyan.

The connection is the online payment service, PayPal, bought by eBay for $1.5bn in 2002. Founders Fund founder Peter Thiel was chief executive, John Malloy sat on PayPal’s board before he co-founded BlueRun and Scott Banister was also a director. Mr Thiel was also an early investor in Facebook and both have invested in Slide, which provides popular social-networking widgets.

“The fundamental investment is in people who can make the seemingly impossible possible and the unlikely likely. We’ve worked together on other things and Scott is someone who has done great things a few times over and he is still a young guy,” says Mr Malloy.

The 32-year-old is a serial entrepreneur and co-founded IronPort, an email security company that Cisco bought for $830m last year.

Mr Banister draws parallels with Zivity – IronPort aimed to challenge the dominance of Sendmail in email, Zivity aims to challenge the dominant advertising model for social networking.

“The subscription model is coming and we are interested in having great content and paying the people that create that content,” he says.

Subscribers to Zivity, which is still in invite-only mode, get their own profile page where they can add their details, friends and status updates, but the focus is really on the models and photographers, with members allowed five votes a month to give to their favourites.

Mr Banister says it is giving an unprecedented 40 per cent of its subscription revenues to the content creators, divided according to how many votes they get. His own wife Cyan, as well as being Chief Strategy Officer, is also one of the topless models eligible for the profit sharing.

“You see stars like Lindsay Lohan appearing nude [as Marilyn Monroe] in New York magazine and getting paid for it, but in this era of self-publishing, women do it on MySpace and see their photos taken down by the MySpace abuse department,” he says.

“There’s a big gap we can bridge here, the models and photographers are really excited.”

Despite soft-porn photos being available in abundance on the internet for free, Mr Banister feels Zivity can still create sufficient interest to be a profitable business.

“We’ve close to 30,000 people on our waiting list to get in, the reaction has been incredible,” he says.

“We’re creating something here that is just not available on other social networking sites and we’re providing an outlet for models and photographers that they’ve never had before.”

March 9th, 2008 in Digital media, Internet, Media, Tech Finance | Permalink