Ello, the social network that won’t sell your data, gets $5.5m investment

Ello, a social network promising to never sell user data or display advertising, has secured investments worth $5.5 million (£3.4 million).

The platform, which launched back in August, has also become a Public Benefit Corporation, meaning that these values must be upheld, even if Ello is acquired by another company.

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The social network plans to make money by following the "freemium" model used by businesses like LinkedIn, introducing micro-payments for additional features.

Lee Bouyea, from Fresh Track Capital, one of the network's investors, praised Ello's "unique spin" on the business model, however, others have questioned how successful it will be when applied to social media platforms.

"You don't invite your friend to connect with you if it costs your friend money. Even in the world of digital music, you can pay for services but most people don't," James McQuivey, an analyst at tech research company Forrester, told the BBC.

Ello founder Paul Budnitz has dismissed those doubting the firm, asserting that its "business model is tried and true." Mr Budnitz also compared users paying to customise Ello to the way in which smartphone owners readily pay for apps to customise their handset.

He also revealed that not collecting user data is reducing the company's outgoings.

"If you ask me what the demographic of the Ello user is I can't tell you - I don't know," he said.

"Maybe anecdotally but not at a granular level.

"While Ello has grown incredibly fast, we still have 14 staff.

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"We're adding a few more people to help handle growth - but because we're not selling ads or mining data, there's a whole load of people we don't need to hire."