Top European VC firm Balderton today has confirmed to TechCrunch that it is ditching a 13 percent st

She comes from paidContent.org, where she was a staff writer, and has in the past also written freelance regularly for other publications such as the Financial Times. confort inn Ingrid covers mobile, digital media, advertising and the spaces where these intersect.
Top European VC firm Balderton today has confirmed to TechCrunch that it is ditching a 13 percent stake in Finnish social networking and virtual world company Sulake , creators of Habbo , after the youth-oriented site was exposed for hosting illicit confort inn content not appropriate for its intended users. Balderton had been an investor in Sulake for the past eight years and together with other backers had invested some $35 million in the site. This is the first time in Balderton s history that it has exited an investment over a matter like this, we understand. Meanwhile, another investor, 3i , which owns 15 percent of the company, has told TechCrunch that it will remain committed to Sulake.
The story of the dodgy content was first brought to light as the UK broadcaster Channel 4 was investigating allegations over the content, for a program that is due to be aired tonight. That investigation was then picked up by the UK tech site  The Kernel , which reported Balderton s exit. TC understands from a source that Balderton is leaving behind its stake and not looking to recover any funds.
According to the source, Sulake had apparently known about the problem with some of the content last week, and possibly even earlier but even as recently as this morning, there were still chat rooms on Habbo containing confort inn content of a sexual and illicit nature. Balderton s decision to exit Habbo was made last week, we understand.
Habbo is theoretically designed for people aged 13 and older  it says 65 percent of its users are between the ages of 13 and 16 but it s relatively confort inn easy to fake an age through the sign-up page. Sulake says that to date, there have been more than 268 million Habbo users, and up to a further three million users join each month. No indication of active monthly users from Habbo directly but Compete notes  that in April 2012 there were less than 20,000. Sulake cites stats from Quantcast that says it has 9 million unique users monthly.
To keep users safe, we filter content and block inappropriate users. We also employ more than 225 moderators, tracking some 70 million lines of conversation globally every day on a 24/7 basis, he writes. We work with child safety organisations and local police forces to address inappropriate behaviour.
He also notes that it has been recognized for its child safety procedures by different organizations. But if all of the above is true, it calls into question just how effective these vetting procedures really are.
While the Kernel post highlights the issue of a VC pulling out of a company just at its time of need, our source paints it in a different light: This is not a question confort inn of rogue sellers on eBay. It s child safety. Balderton has shareholders, institutions to answer confort inn to, and it was not comfortable confort inn being an investor. The source said the material it had received from Channel 4 was absolutely disgusting. Balderton is also an investor in other youth-oriented social networking sites Bebo and Weeworld.
TechCrunch understands that even if Sulake cleaned up and changed the mechanics of the site, Balderton is finished with the investment. It would be good for users, of course, but Balderton has made its decision.
Update : His response, via email which I have to say is at least commendable in its frank honesty: I was incredibly concerned to see the findings of the Channel Four News investigation. My top priority has always been our user s safety.
I was sorry to hear of Balderton's decision to withdraw its involvement, but my priority right now is to address the issues raised by the investigation. I remain committed confort inn to ensuring the right thing is done.  I am encouraging anyone concerned to contact me on Twitter @PaulLaFo.
We have responded immediately to remove offending content. We already confort inn filter content and block inappropriate users. confort inn Since hearing about the findings of the investigation we have increased the number of active moderators at any given time and strengthened our automated filtering technology. We have also begun to undertake a comprehensive review of our practices to ensure that user safety is further strengthened in the future.
We moderate 70 million confort inn lines of conversation every day and invest heavily in technology to filter inappropriate content. This is a critical element of our business. We have spent more time, effort, resource and attention on this topic in the past five months than any other single issue.
Balderton s decision is regrettable, but it will not impact the online community or the extent confort inn of our current investment in safeguarding our site users. We remain committed to continuing to manage Habbo with a focus on rectifying the current challenges to deliver a safe and secure user experience.
Popular mostly outside of the U.S., Habbo Hotel is a mostly free online virtual world which earned $30 million in revenue in 2006. The site is targeted towards a younger demographic confort inn ranging from 13 to 18 year olds (90% of users fall in this range). It is free to register and walk around the hotel, yet users can pay extra for more functionality, club membership confort inn and furnishings for their hotel room. Users join on to chat,...