The marketing-technology company will put the capital toward ramping up sales and marketing of its software.
Dakota Venture Group, a Grand Forks-based fund run by University of North Dakota students, led the equity component of the round. Fargo angel investors Brian and Howard Dahl also participated.
"Buzz360 combines the experienced management team and practical Midwestern approach that we like in our portfolio," said Dan Daffinrud, Dakota Venture Group chairman, in a statement. "We believe its robust software platform provides small businesses with the tools needed to continue to grow in the 21st Century."
Entrepreneurs Lisa and Klaus Schneeganslaunched Buzz360 last year.
The company pitches its software to media companies, franchisors and other firms that want to offer marketing tools to small-business partners. Buzz360 customers can apply their own brand to the product and charge businesses for using the technology, which automates tasks like distributing marketing emails to customers.
Before starting Buzz360, the Schneegans built Praxis Software Solutions and sold it to tech giant SAP in 2006.