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New funding values LinkedIn at $1 billion
SAN FRANCISCO |
SAN FRANCISCO (Reuters) - LinkedIn, an online destination for professional networking, raised $53 million from investors in a fourth round of financing, giving the company an estimated valuation of just over $1 billion, LinkedIn Chief Executive Dan Nye said.
Private equity firm Bain Capital's Bain Capital Ventures led the investment round, and LinkedIn's existing investors, venture capital firms Sequoia Capital, Bessemer Venture Partners and Greylock Partners also put in money, the company said.
Jeffrey Glass, Venture Partner at Bain Capital Ventures, said the $1 billion valuation is a "big number if you think about it in absolute terms."
But Bain felt comfortable with its calculation given LinkedIn's popularity and the growth opportunities that lie ahead, Glass said. "We... feel like we'll make a nice set of multiples on our money."
A handful of Web 2.0 start-ups, providing people innovative ways to interact online, have recently secured high valuations.
Last year, Microsoft Corp invested $240 million in Facebook Inc, valuing the social network at $15 billion. This January, Slide Inc, a start-up that lets people create photographic slide shows for social networks, raised $50 million from institutional investors in a round that valued the company at $500 million.
LinkedIn, which is five years old, has so far raised more than $80 million, including the latest round, Nye said in an interview last week.
"LinkedIn is growing like gangbusters and it is clearly becoming a critical business tool," he said.
Nye said he expects the network, which currently has 23 million members and is adding 1.2 million new members every month, to have more than 30 million people by the end of 2008.
The average LinkedIn member is 41 years old with an income of $109,000, Nye said.
The Mountain View, California-based company will use the funds to build its business further and introduce new features.
Nye said LinkedIn plans to introduce its service in several foreign languages this year, but declined to provide specific details.
He said LinkedIn has more than one million members each in India and the United Kingdom.
LinkedIn, which Nye called the "knowledge exchange," lets people connect with others in their profession, search for jobs, make recommendations and check references. In that, it differs from Facebook and News Corp's MySpace, which center around personal interactions.
"People are really finding people on the other side of the planet and reference checking them," Nye said.
The company also may make acquisitions with its new cash, Nye said.
But LinkedIn, which is profitable and generates revenue from advertising and premium subscriptions, has no plans to go public, and neither is it looking to get acquired, Nye said.
(Reporting by Anupreeta Das and Eric Auchard; editing by Carol Bishopric)
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