LinkedIn has raised $53 million from Bain Capital Ventures, Sequoia Capital, Greylock Partners, and Bessemer Ventures. The investment values the business social network at just over $1 billion.
We reported in early May that Allen & Co was out trying to pitch LinkedIn at that valuation. It turns out the company was not actually working with any bank to get this deal, but it still got a 10-figure valuation anyway.
As part of the deal, Jeff Glass of Bain Capital Ventures - the newcomer to LinkedIn’s investor list - will join the board.
The additional $53 million is on top of $27 million raised over three previous rounds and brings LinkedIn’s total funding to $80 million. In contrast, Facebook has raised almost $500 million. More direct competitors Doostang and Visible Path (acquired in December) raised $4.5 million and $24.7 million respectively.
Several of LinkedIn’s investors are shown in a video below discussing this investment and the company’s prospects:
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$53 millions may be considered an exit for some…
Booyah! So where’s the liquidity? Where’s the exit? Anyone want to buy my shares? Hell, how do I sell my shares? What? I can’t? Daaanggg!
@Murali Thats an Associated Press article… don’t you know that they are banned here?
i am shock they are valued so low
valued too high, 1 bill for no business model. amazing.
At such a valuation, these investors expect an exit at what level, 4 - 5 billion, 20 - 30 billion?
LinkedIn must be a sure thing.
One billion might be a steal if they can hold off Facebook’s slow, subtle entry into workplace social networking.
Could be a good purchase for Google down the line . . .
Visiblepath has already been sold to hoovers/d&b and it raised around 20M.
Xing is the European competitor and is public with a $300M market cap.
Spoke has raised $25M or so and was founded around the same time with a similar positioning.
I still feel that LinkedIn has been growing in a relatively slow pace compared to the other social network peers (of course it serves a different demographic and purpose, but still?) …
At a user, I still don’t think they have nail it yet. The user interface is different (I suppose they they think that is unique) but it’s actually quite counter productive for its purpose. It’s not as appealing to mainstream users (assuming majority feels Facebook’s UI is more captivating) .
And more importantly, they fail to share a broader vision that clicks with its users. I still feel its billion dollar potential is blurry at this point of time.
Bogus! I mean seriously…whats wrong with these ’super smart’ VC guys…do they have statistics of how many people have got a job via linked in? Does a recommendation from linked in really matter? If you are applying for business school, does the school give weightage to your linked in recommendations count? Can you show your interviewer what you are worth by just giving them a link to your linked in profile? If I am looking for a job, I really won’t go looking around linked in for connections.
It has ’some’ value alrite, but to give it a billion dollars valuation is off my head… but then again I don’t have a MBA from Harvard and so cannot be ‘considered’ smart enough..
@RIAA I’ve heard that they are actually profitable based on their job listings, advertising and subscription businesses.
Hmmm…wonder what these investors see in this company that others don’t?
Personally they are very far behind in the networking arena. For one, LinkedIn is very Web 1.0. Also I would like to know LinkedIn’s user retention rate. A lot of people that I know, created a LinkedIn account but never went back and not able to close their account. LinkedIn has been parading around their number of users. If they were to show number of active users…it may hover around 40% - 50%.
Like what Darren Lee @9 said, they failed to click with their users. Wish them luck.
a $1 Billion dollar valuation is grossly overstated - just like how Facebook’s valuation is supposedly $15B
whoever is calculating those numbers - are a bunch of idiots, everything is going to hell
I’ve got some magic beans for Bain, Sequoia, and Greylock.
The difference between LinkedIn’s investors and the idiots who post comments on Techcrunch, is many many billions of dollars in net worth.
Well, they certainly were trying hard to justify a $1B valuation in that video. I’m surprised they did that. If things dont work out, that won’t be a pleasant video to watch for them…
@JustaGuy
You mean between you and Linkedin’s investors, right!
Yeah, aside from constant growth, profitability, a focused audience, solid leadership, and actually providing a useful service, Linked In really doesnt have much going for it.
LinkedIn performs. This is a recognition of that… hopefully they can polish the edges now and deep dive into the HR market and vetting of company profiles.
The evolution has been .plan, resume.txt, resume.html, and now LinkedIn.
Good for them, they deserve it. I saw one of the execs on a local TV report here in Southern California. He was talking about the high price of gas at the pump. He had his linked in company tshirt on.
It was great. Keep up the good work!
Out of curiosity, how many of you have inked a contract, sold more vaporware, or landed a big new client through linkedin?
I think a lot of you are overlooking the investor (Bain). Microsoft invested in Facebook with a supposed valuation of $15 bil, but this was for purely strategic purposes, meaning that that valuation is effectively meaningless.
On the other hand, Bain Cap is a highly regarded VC firm, with a strong connection to Bain Consulting, so I’m sure they know what they are doing, and not only value LI at over $1bn, but expect an exit of several multiples of that price.
Linkedin is worth one hell of a lot more than Facebook!
Why they need 53 million more?
May be to offer the API they are promising…
LinkedIn is the real deal.
Values each profile at $50 and currently driving $5 per year of real revenue per user.
The only questionable move is the real value that Jeff Glass is bringing to the board- of course aside from his Harvard MBA:)
Congrats LinkedIn
Wow. The valuation is huge and I am sure it will continue to grow as more and more people catch on to the trend of online business networking. I think the concept is a great idea.Here in Australia we have Zaabiz as our business networking site and it seems to be getting bigger and bigger.
linkedin is doing a lot of things right…they put a lot of effort into seo - and show up on the first page of the serps for just about every person that has signed up.
not to mention they actually have a business model.
congrats to them!
the negative kiddies out here should stick to building out their widget empires.
Not sure about the nay-sayers here. LI has a revenue model that is proven and accepted in the business world. Sorry you folks have been excluded. Maybe try getting a real job or degree from a reputable school?
My guess is that most negative sentiments come from those under 25 or outside the US. Thankfully, it is not up to them whether a business will succeed or fail as a result.
FWIW, we’ve inked a number of deals as a result of LI intros. All B2B, no consumer crap; consumer biz is a nightmare.
“My guess is that most negative sentiments come from those under 25 or outside the US. Thankfully, it is not up to them whether a business will succeed or fail as a result.”
@28 i cant believe how idiotic you really are (Those comments were lame so they must be from outside the us) keep telling yourself that! and you wont know whats going outside of the USA. live with your blinkers on, its good for us!
You nay-sayers have been brain washed by MySpace and Facebook hype. LinkedIn offers real value to users and has so, so much potential. I’d say $1b is low.
Maybe with all that cash they can buy and integrate something like Tripit.com… so they actually have some functionality that is, like, useful.
Great site, great service - but $1bn - nah!
oh god we are seeing such abuse of this “valuation” term.
please at least prefix it with “hypothetical”.
Frank wrote…“My guess is that most negative sentiments come from those under 25 or outside the US. Thankfully, it is not up to them whether a business will succeed or fail as a result.”
So lets get the 50 - 60 year olds to set the pace for the site..yeah..that is really funny. No wonder LinkedIn’s UI is old and ready to retire.
Oh by the way…I am not from “outside the US”. You know, people from “inside the US” are also smart enough to know that LinkedIn is overvalued and overhyped.
Yes, they do have subscriptions but again how many people are subscribers and how many people are active users and how many just register their account on LinkedIn and never come back. Why is LinkedIn hiding these information?
And why isn’t LinkedIn allowing users to cancel their account easily?
Linkedin is the most important social network in the world. Good for them. They deserve that valuation and a whole lot more. Congratulations!
Constant Over Valuation (at least in my opinion) of Web 2.0 Services makes me wonder if another Bubble is about to burst…
they might want to fix this “I don’t know him/her” issue that everyone is always complaining about. It does nothing but upset users and keep many from returning or actively using the site as it’s intended.
My contribution to this post… jog to the end of the track and you’ll automatically land back on this post (magic
).
http://www.jogtheweb.com/reade.....rackId=113
bubble? nope. actually these guys are getting in at low valuations. seriously, anyone that does not recognize this as a fact should renew their aol account.
prediction: “dot com” in your corp name will come back (like wearing a throw-back jersey) and will prove itself to be a market positive for the next 50+ years (like aviator glasses).
I won’t speak to the valuation because I think all pre-IPO company valuations are so subjective. However, I have gotten a lot of value out of LinkedIn for business contacts and finding new employees. Unlike a Facebook, LinkedIn has a revenue strategy beyond ads which I think makes it a compelling company. Only time will tell whether they can live up to that lofty valuation but I think their valuation at $1B is more plausible to me than Facebook’s $15B.
This is great news for LinkedIn and it’s founders. Congratulations.
And we’re ready to help out if (or should I say when) they need a real business model.
congrats to Reid, Dan, & other folks over at LinkedIn… they’ve worked hard building a great business over many years, and they’ve got the users & the revenue to show for it. solid demographic, solid business model.
i’ve used LinkedIn successfully many times for multiple purposes — recruiting, partnerships, angel investing, startup research, etc, etc. and that happened when i’ve worked for companies of various sizes: at PayPal, at Simply Hired, even for my own LLC company of one.
Thanks Tuyen, that’s probably the most reasonable assessment I’ve seen here.
I get too drunk and excited at night when I find “someone wrong on the interwebs”. The B2B world could give a shit about consumer web tech, there really is $ very only a handful of companies.
For my old startup and a few others I know of, Linkedin was the best return on investment for job postings. We did a comparison between Linkedin, Hotjobs, Dice, Monster and a few others, and Linkedin provided the most resumes in terms of quality candidates by wide margin. (No, I don’t know Reid or anyone else at Linkedin).
Linkedins’ value can be even much more than 1 billion. Where they lack is a strong marketing campaign where Premium Membership is transformed into a status symbol. Also the heavy users (500+ people) should be granted free access to some kind of a status and free extra services (with their earned status). There should be a schema similar to Credit Card business.
I am sure Linkedin has plans in these areas. I think these things are really hard to implement but doable in right hands. Hopefully, they will reach the right talent to make Linkedin the major player on online networks.
$53 millions ohhh I join http://www.mydollarpage.com
i use linked in every week, often every (working day). I can see how for some it has less value but for me it’s a great business tool. I can think of at least 5 different scenarios where it has extremely valuable.
I’m not a heavy user of LinkedIn, but I actually noticed in the last week that there is a high correlation between incompetence and the number of recommendations amongst some people I’ve worked with in the past that I found on the site.
Most of my connections have zero or one recommendation. I found two former colleagues with 10+ - both completely useless, one completely unethical. Gives me a new perspective of the site - I’m now a little wary of the “overly connected”!
Still, I don’t mind it as a tool, but I don’t see the point of paying for it.
Anyway, that is all a little off-topic, but I wanted to vent.
The fact that social networking is big business is not that surprising when you consider the fact that networking in the world of atoms is also big business (e.g. the gross revenue of all industry conferences in the U.S.). I recently participated in a panel discussion at RealComm entitled “The Future of IT: Social Networking & Beyond.” My message: “If social networking (sites) can work for lawyers they can also work for commercial real estate brokers.”
Networking has always been important vis-a-vis business development. What the Internet allows a business to do is extend its reach beyond what was formerly possible and do it at a price point that makes it a “no brainer.” What gets lost in all the buzz is that while the medium may be new, the activity is simply the way business has been done forever.
that’s actually not a good sign if they have brought in $80Million in cash and the best they’ll do is 12.5x valuation on that. Liquidity preference on that money is probably ridiculous.