Angie’s List Raises $22.5 Million; Sees IPO Within 18 Months

Angie’s List, the premium ratings and review service for home and medical services, has announced that it has raised $22.5 Million from institutional investors as it prepares for an IPO within 18 months. Investors in this round include some public funds managers, including Wasatch Funds.   The company previously raised $48 million, making for a grand total of $70.5 million raised. Battery Ventures remains the lead investor.

The Indianapolis-based service charges members anywhere from $10 to $67 per year for access to its ratings and reviews. The service reports over one million members, which probably translates into at least half a million paid and trial accounts, since there are typically two members per  account.

Current revenues are not disclosed. But in 2008, roughly half of Angie’s List’s $50 million  in revenues had come from  membership and set up fees. The other half had come from advertising from reviewed companies that are highly rated (“B” and above) as well as national companies, such as appliance makers and retailers. Advertising can be found on the website as well as in a printed, monthly magazine that is well read by members.

Angie’s List has grown its mission considerably in the past couple of years. It has raised its profile with  aggressive television, radio and print advertising, and added medical reviews, which it has intended to eventually break out as a separate, paid service. It has also added national services, for categories such as custom car restoration – it takes its Indianapolis roots seriously– and recently unveiled The Angie’s  List Big Deal, a group buying effort that is now in 30 local markets and will be in 50+ markets by year end.

The big question marks for Angie’s List are whether it can simultaneously sustain its growth in the face of free competitors, such as Yelp, ServiceMagic and others; get beyond its older, home owner demographic; successfully extend its service to the new categories, and others; and maintain its friendly, home-spun “community” image.