Facebook takes $100 mln in debt as CTO departs
By Eric Auchard
SAN FRANCISCO, May 12 (Reuters) - Facebook Inc said on Monday the company has taken out $100 million in debt financing and is looking for a replacement for its chief technology officer.
Facebook spokeswoman Brandee Barker, confirming a recent Business Week story, said the fast-growing social network site based in Palo Alto, California, has taken out a $100 million lease facility from TriplePoint Capital, a specialty finance company that backs venture-funded start-ups.
Facebook plans to use the funds entirely for new computers and data centers, Barker said. The equipment lease financing frees Facebook of the need to raise further venture funding that would dilute existing shareholders.
Gideon Yu, Facebook's chief financial officer, told the Wall Street Journal, which also reported the funding, that debt financing offers the company greater stability. "Raising debt should be a sign that we're entering a more mature phase," he is quoted as saying.
Since October, Facebook has received $375 million in financing, valuing the firm at $15 billion, according to a source close to the company. Microsoft Corp (MSFT.O) invested $240 million, Hong Kong tycoon Li Ka-shing put in $120 million and smaller investors contributed another $15 million.
Prior to this round, Facebook had received $37.5 million in venture funding. Facebook was founded in 2004 as a way for Web users to share personal details with selected friends and has become a global craze with 70 million active users.
Separately, Silicon Valley blog AllThingsD.com reported on Sunday that Facebook Chief Technology Officer Adam D'Angelo had left the company.
Facebook confirmed that D'Angelo was "taking time off" from the company and said it has begun a search for a vice president of engineering to replace 23-year-old D'Angelo.
D'Angelo, a high school friend of company founder and Chief Executive Mark Zuckerberg, could not be reached for comment.
Business Week pointed out that the funding deal could be a boon to Rackable Systems Inc RACK.O, a supplier of servers and storage for Web data centers.
Rackable counts Facebook as a major customer, deriving 17 percent of its $68 million in revenue during the latest quarter from Facebook, according to a company filing. Rackable shares were up 34 cents or 2.7 percent at $12.76 in afternoon Nasdaq trading.
TriplePoint, which is based in the heart of Silicon Valley venture capital world in Menlo Park, California, has provided more than $5 billion in financing to 1,200 mostly venture-backed companies. (Reporting by Eric Auchard; Editing by Gerald E. McCormick)
