Serial German entrepreneurs Alexander, Marc and Oliver Samwer have invested in Facebook, we’ve heard from a very reliable source - presumably as part of Facebook’s recent $15 billion valuation round with Microsoft. We are still trying to nail down the size of the investment.
The Samwer brothers, all in their thirties, founded Alando (sold to eBay in 1999 for $54 million) and Jamba (sold to Verisign in 2004 for $273 million, now part of News Corp.). In 2006 they founded the European Founders Fund to support Internet businesses in the U.S. and Europe. They have investments in LinkedIn, MFG.com, HomeAway and ReachLocal.
In November Facebook added to the $240 million investment from Microsoft with another $60 million from Hong Kong billionaire Li Ka-shing. The financing round remains open, Facebook told me this morning, but they are not yet confirming the investment.
The Samwer brothers were investors in German Facebook clone Studivz, which sold a year ago for €100 million.
The rumored investment by Samwer is expected to be at $60 million for 0.3%
i thought those brothers invested in the Dutch Facebook clone.
They are actually all in their 30’s, but still, not bad going for a group of 30 somthings..
Old and busted: google stock. New Hotness: Zuckerbucks.
David - where are you getting your info?
here it is. http://venturebeat.com/2007/05.....ter-clone/
wow. first you copy, then you sell, then you invest in the original.
How can anybody justify this?? That valuation is incredibly inflated
Ely - yeah thanks for that, I had forgotten about it. Added a sentence.
Why?
FB is already over capitalized, especially given a clear business model and path to profitability.
“…serial German entrepreneurs…”
If they’re German, I bet they’re SUPER SERIAL!
(Sorry.)
Michael, wouldn’t you love to know?
A German blog from a newspaper with high reputation (http://faz-community.faz.net/blogs/netzkonom/archive/2008/01/15/samwers-steigen-bei-facebook-ein.aspx) says they got a cheaper valuation then Microsoft. In exchange they offer their help in entering the German market. The Samwer brothers where early investors in StudiVZ a German Facebook clone, which was sold for 85 Mio. € and is the current market leader in student communities in Germany and Germanys biggest website according to Page Impressions (10 billion PIs)
David, errr, you just lost my attention. I hate coy.
Inflated valuation, Not sure about that. Advertising is the biz to be in these days. Millions of eyeballs a day would bring in some revenue.
ok, made some changes to the post…no press release has been issued, but this is a done deal.
They will need all the help they can get.
StudiVz and SchülerVZ topped yet again the German IVW numbers, iirc both over 10 billion pi, leaving everybody else far behind.
It will need way more than ‘just’ to enter the german market with a translated (maybe even crowdsource translated) version. Though FB is superior with it’s technology, nobody cares about technology in a foreign language only.
too bad, that they did not invest that money in other start ups. Facebook is an easy lowrisk investment, so you cannot blame them. Facebook is a nobody in most of EU. I guess the German start up scene still has difficulty raising money for more innovative ideas, or they simply dont have them.
It would interesting to hear from them what the problems are from their point of view with the German startup scene. Why have they made such few investments. Then again they specialize in making a localized (Germanic) version of a business that has been proven in a different market.
It’s amazing how difficult it is trying to raise your first $100K. Once you’ve made it you then have people throwing $$$ that you don’t need…
They invested in our company too. They are smart, aggressive investors. They make decisions fast and they have a great track record. Smart guys those Samwers…
If an oncoming recession actually hits, online businesses (especially facebook) will be the first to deflate. The company is likely way over valued.
When a recession comes, companies cut their expenses from online advertising first (it is still not as proven as traditional methods, or at least companies don’t see it that way), which will quickly blow holes in the business models of facebook, myspace, and other related websites.
StudiVZ and it’s alikes all around Europe (some of them are Samwer investments) face serious competition with FB recently announcing it’s entry into the German market. Take into consideration that, despite it’s relative size, StudiVZ (the German FB copy) is still the 2005 version of FB (the original) and has not shown any technological innovation since its aquisition. Take a close look at the current managment, too.
How about this: First the Samwers sold StudiVZ to Holtzbrinck for 100 mil. in Dec. 2005, then FB buys from Holtzbrinck to get a stronghold in the German market. Samwers have the connections and the reputation to mount such a remarkable deal.
Kelly: It totally agree. Smart and aggressive investors with a remarkble track record.
However, I see them more as dealmakers, not so much as innovative business people. Take a look at their track record at Jamba.
They startet StudiVZ with Ehssan Dariani, a man who was a previous FB intern. FB also took a deep look into buying StudiVZ in 2005 (presumably did not investo because of “security issues”). Now the same people that copied FB together with a former FB-intern get an opportunity to invest in the company. Why?
Correction: StudiVZ was sold in late 2006.
This article says
http://faz-community.faz.net/b.....5/769.aspx
the Samwers get a discount for helping FB with its expansion in Europe.
Hence, these guys help crushing the business of their formerly owned FB copy StudiVZ (now owned by Holtzbrinck). I guess Holtzbrinck loves doing business with them in the future.
Gandolf:
I think you’ll find that any successful business person has shortcomings in one form or another. Look at Bill Gates. True, Samwers are probably better networkers and dealmakers than they are technology visionaries but at the end of the day they have an uncanny ability to make money and that is largely the reason most of us work instead of vacation all year.
German magazine Der Spiegel has an article that quotes one of the Samwers as saying he’s “proud” and they see a lot of promise in Facebook. Original article (in German) here http://www.spiegel.de/netzwelt.....02,00.html crappy Google translation here http://64.233.179.104/translat.....02,00.html
It’s a done deal all right.
Kelly:
Having the Samwers on board as an investor is one of the best things that can happen to a start-up in Germany - for companies that are built to sell, not necessarily to last.
Copying a company (together with an former intern), then selling it (knowing that the company does not have the technological potential as the original ?!) and then, after twelve months, aggressively competing against the very same company. I call this more than witty.
The Samwers know that StudiVZ will not be able to successfully compete against FB. They will crush the very same company that they made a fortune with and position themselves as Zuckerber’s governors in Europe. Thus, using the enormous traffic FB creates to fuel their other investments. What a smart move!
I´m from Germany and used Facebook and StudiVZ. Lately I stopped using StudiVZ cause more and more of my German friends are signing up on facebook and its weird to use two such similar communities. I now receive every day German facebook friend requests from people who are also on StudiVZ. The only friends who are not on facebook are friends who are bad with english. As soon as facebook is available in German this trend would increase for sure. Facebook is just a better user experience. Still to merge with an existing German copy would speed up the growth and implementation of facebook. StudiVZ´s biggest benefit maybe that they also have the France (StudiQG), Italy (StudiLN), Spain (EstudiLN), and Poland (StudentIX).
They never tried to force on the UK, bc Facebook is just to huge and studiVZ definitely the worse alternative.
And the Samwers, they are also invested in Lokalisten.de which is a competitor of StudiVZ. Is this kind of investment strategy correct? Invest in two competing companies? Is this also common in the US? For Startups in Germany there are not a lot of alternatives to the Samwers as investors, but to me it looks like the Samwers are taking benefit of it. Would you sign an investor contract with the term that your investor can invest in your direct competitor?
I really would like to understand how this makes sense. I am all good for recapitalization or additional funding but …. in this case … why? I do not get it.
Paul: I think Samwers have already monetized (some?!) of their investment into lokalisten.
Fabian: Why does it not make sense for the Samwers? They already made a lot of money, now they compete against the businesses they co-founded together with the “largest gorilla in the jungle”. They may buy back StudiVZ for a discount (but still with a huge profit for Holtzbrinck - the Company was sold for 100 mil and is currently valued around 750 mil). Or they may simple sweep StudiVZ out of the market.
Overvalued - certainly because thats what Web2.0 is. But its either a case of the ‘Emperor’s New Clothes’ or the Samwer Brothers have had site of the Facebook business strategy. No doubt a content play ….
Gandolf: Where do you have your 750 mil valuation for StudiVZ from?
These brothers have had a heck of a good luck run with previous ventures… I find them more interesting then Facebook
Jon
http://buzvia.com - Share Influence
@Fabian
Smartest thing they could do. fbs entry in the german market will have a huge impact, if they do it right. and the samwer brothers know what to do. it’s not about the money, it’s about the know-how.
StudiVZ is stuck to students and won’t succeed in opening itself to a broader target group. In addition to that the studivz infrastructure and management seems to be too old-fashioned to compete with fb.
@Gandolf & Thomas
the 750 mil valuation is totally wrong.
Facebook wanted to buy studivz and offered a 4-6% share, which would be worth today about 750 mil. that’s all and that’s history.
Daniel: You are right, the 750 mil valuation is incorrect. Insufficient research on my side.
However, I see a significan chance, that FB buys StudiVZ after giving them a beating in the first months. That is if they want to grow very quickly in Europe. If they have more time before the IPO this will be not necessary. I am convinced that FB wins in the end.
This ist stunning: In an Interview
http://www.spiegel.de/netzwelt.....12,00.html
Alexander Samwer explains that “FB is light years ahead of StudiVZ” (with regard to the technological perspective). Together with FB he will be openly competing against StudiVZ.
I wonder: Did he not foresee this situation when he sold StudiVZ to Holtzbrinck in Dec. 2006?
I guess on the first hand the samwer brothers are investors. they sold studivz with profit to holtzbrinck. Now they want to make profit with facebook and I am pretty sure, that they don’t give a sh… about studivz today.
regarding size of investment, WallStreet Journal writes :
http://online.wsj.com/article/.....92163.html
Facebook Gets Big Investment
By Kevin J. Delaney and Vauhini Vara
The Samwer brothers of Europe have agreed to invest in social-networking site Facebook Inc., according to a spokesman for the brothers.
The size of the investment is roughly $10 million to $15 million, said a person familiar with the matter.