SocialGo, which like Google's Blogger did for blogs, allows groups and individuals to easily set up their own social network to which they can add a range of widgets and integrate with the likes of Facebook and Twitter.
The money, from Gibraltar-based Veddis Ventures, will allow SocialGo, launched in 2007, to expand its service, aimed at businesses, organisations and individuals to come together and share their common interests.
As part of the deal Vikrant Bhargava of Veddis Ventures, who co-founded gambling site PartyGaming, will join the board bringing his experience of internet-related industries to SocialGo.
SocialGo, owned by Bright Things, comes as a free service with basic options, but also offers two premium levels of service. For $24.99 per month users get access to a range of features, bandwidth and the ability to use their own domain name.
It also offers a "concierge" service where for $149 it will design, setup and configure the social network on a user's behalf.
According to Bhargava "SocialGo has proven its subscription-based business model for creating online social networks with solid month-over-month revenue growth. The company is poised for expansion, and I anticipate 2010 will be a banner year as subscriptions continue to grow."
As part of the deal Bright Things has acquired Get On With It (Gowit), which has been providing development and support services for SocialGo since it launched. Gowit directors Stephen Hardman and Alex Halliday will also join the board as joint managing directors.
The investment in SocialGo follows reports last week that investors where shying away from investing in social media.
New York-based investment bank that it had seen a sharp drop off in the amount of cash being invested in social media.
It was referred to by some as the Facebook effect whereby investors were reluctant to pour cash into ventures that have little hope of catching or denting the market share of Mark Zuckerberg's social networking giant.
In its 2009 Digital Media M&A Round-Up, Peachtree said that social networking saw the sharpest drop-off of all the digital sectors it looked at in terms of transaction volume from 102 in 2008 to 47 in 2009.