January 18, 2008

Slide Gets Their Huge Valuation And Raises $50 million

Michael Arrington

55 comments »

Three months ago Slide founder Max Levchin assured us that, despite rumors, he wasn’t raising money, and hadn’t even updated his pitch deck. He sure got his act in gear in a hurry, it seems. Today Business Week and The NY Times are reporting that Slide has raised $50 million at a valuation north of half a billion.

Three months ago when he officially wasn’t pitching a new round, the rumors were that he was looking for at least a $200 million valuation. It sounds like he got the bidding war he was looking for. This was their fourth round of funding.

As often happens in big later stage rounds, the well known Silicon Valley venture firms sat the deal out. Investors in this round include Fidelity Investments and T. Rowe Price.

Business Week’s Sarah Lacy seems a little stuck when justifying the valuation - “But let’s get back to the question of whether Slide is worth $550 million. At this second, the answer has to be no, by any normal valuation math. But if Levchin’s plans succeed, Slide will be worth far more.” What isn’t clear to me is exactly what Levchin’s plan for success entails. Currently they’re a widget company with a ton of users (150 million or so worldwide). They’re transitioning and starting to focus on ad selling. But without more details…

Slide

Loading information about Slide…

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Comments

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Dheeraj Sultanian

January 18th, 2008 at 1:40 pm

What’s the business model?
Boris

January 18th, 2008 at 1:44 pm

Spray and pray.
Zach

January 18th, 2008 at 1:49 pm

Does Max even have a plan?
The Real Deal

January 18th, 2008 at 1:55 pm

I bet if Max changed the name to SlideBook it would be worth $20B…and Arrington would write about them all the time. Same business model…lots of traffic…little revenue.

Facebook rocks
damon

January 18th, 2008 at 1:55 pm

look, as soon as slide does ads, someone just like slide will show up without ads and people will flock to them, the fundamental problem is there is no stickiness to slide, none, zip…

oh wait, they do have a neat snowflake background that you can’t get anywhere else, ok, they have one sticky background
Appable

January 18th, 2008 at 1:55 pm

Absolutely impressive!! thanks due to facebook, if not the earlier myspace…
OpenSocialBook

January 18th, 2008 at 2:00 pm

>I bet if Max changed the name to SlideBook it would be worth $20B…
Let me see if I could get $20B… (or, $20)…
George

January 18th, 2008 at 2:01 pm

MySpace certainly won’t allow them to monetize. Facebook is iffy in that respect, but as they’re getting desperate for a business model themselves they’ll put the brakes on any third-party model that works and just co-opt it.
internet user from the 90's

January 18th, 2008 at 2:02 pm

I love Slide!

I get to make cool stuff on the Internet and I don’t even have to pay for it. SO much better than Prodigy.

Thank you Max. Keep working hard!
Appable

January 18th, 2008 at 2:07 pm

>MySpace certainly won’t allow them to monetize.

Oh yeah.. history almost forgotton… so it’s Facebook that made the difference (for Slide)..
Baher

January 18th, 2008 at 2:08 pm

It’s the “facebook effect”, and whether this valuation makes sense or not, is up to facebook more than anything else.

My post about it here http://technozzle.com/?p=51
Jenkins

January 18th, 2008 at 2:11 pm

what a joke!
How To ive Head College

January 18th, 2008 at 2:14 pm

I agree with Baher.

http://www.howtogivehead.wordpress.com
matt

January 18th, 2008 at 2:18 pm

“But if Levchin’s plans succeed, Slide will be worth far more”

I have many plans, probably more then Levchin has, and I guarantee will be worth far more if they all succeed
rfre

January 18th, 2008 at 2:23 pm

#13…

Matt Mullenweg
PO Box 5446
Redwood City, California 94063
United States

Fuckin spammer…
Faramarz

January 18th, 2008 at 2:27 pm

Interesting. Any idea if his stake in this business is any larger than the 2.3% he had at Paypal?

someone correct me if i’m disillusioned. but isn’t a 2.3% stake laughable for a co-founder?? no matter how much the previous payout was, that’s a joke and insult to any founding figure of a business to have to settle (or give up) for so little.
marizpan from toledo

January 18th, 2008 at 2:37 pm

forget the valuation, what are they going to do with $50M? Oh ya, they’re gonna buy a business plan.

Market is going down, people are still investing in questionable (at best) businesses and franchises — 2001 anybody? Same type of deals were happening up until about April of that year.

Good timing for levchy.
naysayer

January 18th, 2008 at 2:39 pm

Michael,

What’s the scoop with the constant Sarah Lacy bashing? Professional jealousy?

The Naysayer
listen_to_techcrunch

January 18th, 2008 at 2:39 pm

And today the federal govt. also laid out a plan for bringing out the US economy from recession.

Is it true that they are changing the name to slidespace???
Sam

January 18th, 2008 at 2:40 pm

Wow….was his state in paypal that small.
Bokon Too Koonet

January 18th, 2008 at 2:41 pm

Yes it was
Narendra

January 18th, 2008 at 2:44 pm

Slide is the online form of the roadside/real world billboard advertising market. Ubiquitous touchpoints.

Right behind “never get involved in a land war in Asia” is don’t bet against Max.
Founder

January 18th, 2008 at 3:00 pm

Slide is just a tool for Max to make the billions that he feels he was cheated out of from the PayPal deal. Max did indeed get screwed, but he learned a valuable lesson: The big boys don’t create anything, they transfer wealth from individual shareholders to their own pockets through an IPO. And that is his plan for Slide.
sd

January 18th, 2008 at 3:19 pm

@23,

Slide IPO? u kidding.
Robin Wauters

January 18th, 2008 at 3:24 pm

Question is, what are they going to do with so much money that they couldn’t do with, say, half of it. I’m the last person to claim we’re in a bubble, but there are definitely some companies to be situated in mini bubbles, including Slide.
Publicus Maximus

January 18th, 2008 at 3:30 pm

Give-me-a-break! This has got to be the biggest fairytale I’ve ever heard.

The truth is, Slide’s half a billion valuation is by no means a solid number. The investors say it’s worth half a billion, I say it’s worth in the low seven to eight digit range.

Only IPO will tell the consensus. But going for a fourth private round instead of an IPO sounds fishy to me, you go that route if you have no grounds for public scrutiny of the financials or business plan to justify high valuation.
panos

January 18th, 2008 at 3:31 pm

damon #5, george #8
i agree, when it comes to monetization, either the people will flee, or they´ll run into problems with the host platforms.
however, what they have accomplished is the number of users, which should put them in a good position when it comes to potential revenue sharing with the hosts.
imo, this is realistic.
Technicle

January 18th, 2008 at 4:04 pm

or setup their own facebook-equiv……
dale

January 18th, 2008 at 4:09 pm

Way to Max- Slide rules
AnonTroll

January 18th, 2008 at 4:25 pm

Get serious, no one should be asking Slide to justify their business model when Facebook is getting $15B valuation, sheesh.
Technology Recruiter

January 18th, 2008 at 4:40 pm

OMG. Is anybody else having flashbacks to the late nineties, again? Investors haven’t learned their lessons from prior experiences. It’s the same mistakes over and over again. Lets hold on and wait for the next tech-wreck to happen again. Wasn’t there a lot of grief over Skype being acquired for $2.6B. Ebay later admits they significantly paid too much and took a $900m impairment charge. Who was the investment banker who brokered that deal to Ebay, they obviously got it wrong, but got a great commission in the end. Wasn’t Myspace the place to be with the soaring valuations this time last year? It’s like Myspace went out of style as quick as acid washed jeans. From what I can tell people believe slide-shows (Slide.com) are going to change the landscape of the world more than push-technology (Pointcast) in the late nineties - my sarcasm. How much did Youtube add to GOOG’s financial bottom-line for $1.775BB? Can GOOG honestly say that they’re a better brand with increasing profits because of Youtube? Investor strategy 101, jump (late) on anything that might be in vogue, cross your fingers and hope for that one GOOG to happen. Considering that 9 out of 10 start-ups fail, how could Slide, with no real revenue or business-model, be valued at $500M?
etavitom

January 18th, 2008 at 4:47 pm

Very high valuation, but a phenomenal company!
Faramarz

January 18th, 2008 at 5:03 pm

The website is down it appears.

Page Not Found

Sorry, the page you tried to visit was not found. You may want to return to the home page and try again.
Jaisen

January 18th, 2008 at 5:05 pm

500,000,000 / 150,000,000 = 3.33. Over $3 per user of a free service?
Don Jones

January 18th, 2008 at 5:07 pm

The valuation inflation is getting pretty hot. Some investments will pay off and some will be colossal failures…e.g., Ampd.
chrisw

January 18th, 2008 at 5:08 pm

@ #31

I agree. It sounds ridiculous. They make flash slide shows for crying out loud! $500M valuation is just nuts!
David Shantz

January 18th, 2008 at 5:20 pm

Simple truth here is that there are lots of communities that need cool applications to make their sites compelling and to drive interaction. Slide apps are in many ways the glue that holds Facebook together. Here’s some simple math: 150M users, valued at $3.30 each, is about $500M. $3 is average valuation for an audience like this, and with billions of potential users worldwide -they may just be getting started… There is a bright future for companies that create expressive applications that are easy to use and connect with millions of people.

Anyone looking at early stage applications, there is one we have going which has a much lower valuation… http://www.graphita.com
Jackson

January 18th, 2008 at 6:03 pm

Slide is the #1 company on the web.
internet user from the 90's

January 18th, 2008 at 6:04 pm

this valuation per user thing is amazing. lets see. i am a member of:

$5.80 myspace.com (lots of hot chicks wanna be my friend there)
$200 facebook.com (those dorks i went to school with are there)
$44 youtube.com (haha, funny video LOLZ!)
$2 friendster (Brazil is such a cool place!)
$3 slide.com (look me, look me! picturez!)

somebody give me $200 cash and I’ll stop using the Internet.
arnold

January 18th, 2008 at 6:19 pm

hey @37, just tried graphita. nice ui. very smooth. but the ’share’ button tries to make me buy mugs or spam my friends without just giving me a link to the picture — lame.
Hustle Strategy

January 18th, 2008 at 7:01 pm

Crazy. Seems users/traffic is king, no matter what you do.
Speech Girl

January 19th, 2008 at 4:21 am

This is just bizarre - 150 million users but how many people know about Slide as a company?
Max L.

January 19th, 2008 at 4:38 am

You want our real plan?

We’re launching a new personal body lubricating gel to compete with KY. And we’re going to call it…. Slide. Or Slide Lube if you prefer.

Over 6 billion people a year have sex. Of those approximately 33% are prone to “dry spells.” That is where our product comes into play. Imagine if you will that these 2 billion customers each are worth $6, that is only 20 cents more than a MySpace customer and we consider this to be very conservative. We instantly have created a $12B company.

But wait, there is more. Our market research has indicated that our Facebook and MySpace widget customers copulate 3x more frequently than married people. And because they typically do so while intoxicated they require even more of our “Slide” personal lubricant. Now you’re beginning to seeing how this all comes together. We’re brilliantly building and spreading our viral widgets to a market of customers which will use 3x more lubricant than our competitors target market.

Unfortunately there are risks. Just in the past few days MySpace announced some plans to keep some of our best potential customers, off their site. http://www.redherring.com/Home/23460 We consider this just a small setback.

Also you heard it here on Tech Crunch first: we plan on providing each investor in our IPO with one free bottle of Slide Lube. We have a feeling you’re going to be needing it.

Respectfully,

Max L.
George

January 19th, 2008 at 9:30 am

Problems with monetizing widgets.

0. The only way Slide can generate revenue is advertising. Paid or freemium memberships will not work, or at best be a tiny fraction of the gross.

1. You cannot push ads to the user. Nobody is going to be happy to wake up and see that their “best friends” slide show had a “Norbit” background/border pushed on top of it. (No, you can’t solve this by targeting the user’s tastes. You only need to get it wrong once to piss off the user forever.)

2. Going from no. 2, users will have to pull the branded widgets themselves. There are a few problems with this. First, not everyone will do it if it’s opt-in. Remember Beacon? Second, Even those users that will download branded widgets will not update them in a timely fashion. If someone likes The Lord of the Rings, they will use that branding for a long time. Who cares it it’s not the current studio promotion. You could try to implement some sort of branding timeout and suggest alternatives (The Hobbit is coming out), but again, you risk annoying the user. Remember, this is supposed to be personalization.

3. Brand identification. I can see people wanting to brand their stuff with movies and cars, but those will be the bulk. Who is going to add Revlon lipstick to as their branding? Limited ad inventory.

4. Nobody will brand their slide shows with the new Ford Taurus, and marketing Ferraris to 16 year olds is a waste of money. Same thing with other luxury brands - high voluntary adoption, but limited value to the advertiser.

5. Limited market segment. I don’t know what the age breakdown of widget adoption is but I’m willing to bet the bulk of it is under 25. A lucrative market, but a limited one, especially considering the brand identification of this group is way out of their price range. (See #4)

Addendum:

I can see some value with pushing ads to widgets that have been branded with dynamic promotions. Consider music albums. If a user brands their widget with 50 Cents or some other (sigh) artist, than their new album, concert appearance dates, etc. can be pushed to the widget with very little annoyance. This is a very limited, but lucrative domain that Slide can specialize it. I’m afraid though that their high valuation will push them to want to be everything to everybody and not let them focus on their strengths.

Best of luck to them anyway. If Max cashes out big I will only get that sick feeling in my stomach if Slide is dumped on somebody without any revenue sources. If however they manage to make a profitable business out of this, my hat is off.
Peter

January 19th, 2008 at 11:16 am

Why would Facebook and Myspace allow ads from Slide in there network?
Ron Paul

January 19th, 2008 at 2:58 pm

Does anyone know Slide’s revenue figures? Is it zippo?
Marc

January 19th, 2008 at 8:56 pm

Folks, heres the deal. Facebook is in beta for its own “PayPal” like system. Facebook aslo sold 24million $1 gifts last year. NOW…think of how slide can leverage that especially if Facebook’s fees are low. If you think people paying $10-$14/month to play world of warcraft is down right silly (9 million people world wide now to be exact) just imagine the cash that people will fork over just to have the coolest and rarest slide for only $1 extra. Its the same thing, social networking is “Just a game”…….and tons are playing………either be a player or rake in the cash. This is the year of near micropayments for digital goods. Damm I need a blog already.

@Jaisen, I thought the same thing as well, however, without the “?”.
Bali

January 21st, 2008 at 7:37 am

Its the same thing, social networking is “Just a game”…….and tons are playing………either be a player or rake in the cash. This is the year of near
The Simon George fund

January 21st, 2008 at 8:24 am

As NY Times puts it “Slide Slides into Some Cash”.

http://simongeorgeinc.googlepages.com
Give Me Break

January 23rd, 2008 at 1:43 pm

These guys are still going to be “pre-revenue” after their series Z funding round. (I heard Citigroup is at the table for the next one….) Why is everybody throwing money at this thing? They’d be better off hoarding empty soda cans.