Business networking startup LinkedIn is announcing today that it has raised another $22.7 million, on top of the $53 million D round it closed last June at a $1 billion valuation. The new round is a follow-on to the series D at the same valuation, bringing on strategic investors SAP, Goldman Sachs, and McGraw Hill. Existing investor Bessemer Venture Partners also participated. This brings the total capital LinkedIn has raised to just over $100 million.
The round actually closed last month, before the financial markets began their tailspin. More cash in the bank is always a good thing, especially now. LinkedIn has 370 employees and says that revenues are growing more than 100 percent a year. “The company as been profitable since 2006,” CEO Dan Nye tells me. Although that might change this quarter, he cautions.
The extra cash should help him weather the storm. He might even one use some of that money for acquisitions.
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22.7 MIL? That’s all I will say.
…. and…. ?
370 employees? Wow.
Wow, Goldman Sachs is still giving out money? I know they didn’t go under or get bought out but they surely were on the brink… I guess not all sectors of their business were hurt, specifically tech investment.
Peter
http://www.thewebwar.com/linkedin
Did the money they raised in the previous round ($53MM) in June actually help with their international expansion plans? I wonder what aspects of their business has been changing since June. A lot of their revenues come from headhunters and HR depts at companies looking to hire and I guess the economy (i.e., job market) is a big concern.
McGraw Hill, WTF?! Terry is gonna steal this thing away from Reid & company for $.50 on the dollar.
Prediction: LinkedIn will be a McGraw-Hill business in 2009, bought for less than $500M, with a heavy earn-out component.
I agree 100%! The problem with this is that there is currently a $250 million dollar lawsuit against the McGraw -Hill Companies which they have yet to post on their financial records for their stockholders. Please see Miriam Aguilar vs. CTB McGraw-Hill and the McGraw-Hill Companies, along with Kelly Services, Inc.
Both companies have terrible records which affect public policy and local labor forces. Soon, both will lawfully change their ways to stop the abuse and exploitation of their labor forces, here and internatinally.
Welcome to the Jungle!
22.7 MIL? That’s all I will say.
I love LinkedIn but I am starting to really wonder if they’ll ever be able to have a liquidity event with all they have raised.
I don’t have the numbers handy but would love to see an analysis on their ownership vs valuation.
There is such thing as too much….
Oh they WILL have a liquidity event. Doubt the employees will earn anything.
To be able to raise ANY cash right now is an incredible feat….grab as much as you can and hunker down. kudos!
Anyone have color on the valuation? Wonder how the employees stock options are doing…hmmm.
The $1 Billion valuation is something to keep your eyes on. Given where the market is going, including since that $22.7M round closed, I’d expect that number to see some serious compression.
I’m a big fan of the LinkedIn service, but I do wonder about the long term for a company that’s raised $100M with a valuation that’s going to squeeze down a good bit. That’s even given that they’re in a heck of a good position compared to so many other companies with real revenue and a big chunk of cash in the bank.
On the bright side, maybe they’ll avoid the 10- 15% RIFs that’re all the rage in earlier stage companies at the moment.
Well said Jon. The valuation is very interesting
Good to know that Goldman Sachs isn’t doing things like pissing away money on web startups…
if they are growing so fast and were profitable since ‘06, why didn’t they ipo?
Mr sarbanes and Mr oxley
Yes, Where are they now???? We need to enforce the Sarbanes-Oxley law directly to all these corporate thieves and racketeering outfits that pass as companies with integrity. Is there such a thing???? It’s time to hold all accountable for this huge mess! Pay back royally to all those your companies have exploited for your ill-gotten gains, which never amount to anything but jail time!
Everyone knows what that “D” stands for. Down round.
The best way to weather the storm is to zig bullish while others zag duck and cover.
Now is a perfect opportunity to build while others have their head in the sand. Now your not so good internet product can look REALLY good because the other guys are laying off and skipping revisions.
Cash is king, pull everything out of wall street and invest in your own company. Let wall street absorb it’s own losses.
370 people, really?! I think it’s time for a 10% cut, blaming “the economy”. I’m sure there’s more than 37 deadweights at that place.
Wondering if Sequoia invested in the round as well… to keep their stake?
LinkedIn used to be good but they are falling fast. I don’t think they will be around very much soon.
just take money and run….there is no way linkedin will succeed in the long term…all social things, including job hunting, recruiting is happening in facebook…no chance for linkedin
LinkedIn is getting boring. Did not update my account for months.
LindIn isn’t a startup to me anymore.
370 employees? That’s about 320 too many. Seriously, what do all of those people do besides ride scooters around the office all day? They obviously don’t innovate. The network hasn’t changed in years. Post a resume and connect. Big deal.
I wonder what 370 people do at Linked In. They are typically slow on adding features, new development etc. Customer service response is slow. Most of the revenue is coming from Google Ads, Job postings and purchase of inMails and introduction so they don’t need a large Ad Sales team. Are they building a new product or something large is coming up? why do a profitable company need investment unless they are going to use the capital infusion to diversify?
Me too. I don’t know what 370 people do there. It isn’t like they are adding features one a quarter. I would cut half the staff - not raise more money and dillute all the shareholders.
$1 net income is still profitable, what’s more important is free cash flow and how much of it.
LinkedIn isn’t really giving the market what it wants. I hate the recount the tail of the Emperor’s New Clothes, but what is the point once you’ve connected again to everyone you knew anyway? There are NO tools to help the community to broker valuable NEW relationships with people you don’t know but you might do business with. As a prospecting site it is useless.
It is beyond me why they get so many column inches.
Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz
Let me guess, I can find all of this on your web site?!?! Wow you saved my day, thank you for linking to it as well!
NOT.
Aleksy, I founded my company because I couldn’t get what I wanted from LinkedIn. 10 months later, you still can’t prospect properly on it. If that is why you choose to do your business networking online, and it was stated as the “most important” reason for networking online by SMB respondents in our survey this week, I provide an alternative.
Incidentally, “career development”, LinkedIn’s specialism, came last in the reasons to network. It seems I am not alone in thinking they aren’t delivering what people are asking for.
Your site is UK-centric. Great if I’m in the UK. Not so great if I’m not.
80% of our traffic is from the UK. I would guess 80% of LinkedIn’s traffic is from the US. Does that make it US-centric and useless to anyone else?
Sounds like a business that is being run correctly and profitable. That’s rare for web 2.0 startups. Also in the business niche which is much more valuable. With the cash infusion and business model, this is one I would bet on surviving.
You speculate. And it’s not rare. Check out XING in Germany, a direct rival for LinkedIn. Their figures are public, as is the company.
Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz
I think the linkedin “companies” set of features is a pretty excellent innovation recently. I know when I’m doing market research or trying to get to understand what a company is about “companies” is really valuable. Its a simple task to map my network against a given company and find someone to start a conversation with…
Just sayin’
I do wish they’d loosen the APIs up much more snd/or make their partner programs more transparent.
Jim
AideRSS
I like that you can utilize it, I don’t quite understand what it gets me to put my link out there. A random request to link to me?
Is someone using LinkedIn in a way that is creative and not just linking and reading other links?
What about linkedIn Web Conference for Only LinkedIn users.
Or a T&A Session - Opps I mean Q&A session with a corporate leader?
Then I would see the value. But as far as I can see (and I can’t see very well) the current scope is too limiting.
It’s nice to see a progressive company receive this type of funding in these hard times. I can see good things in the future and for them to be the standard business social network and continue to grow.
Craig
http://www.budgetpulse.com
In this current situation of financial market deleveraging and deflating financial bubble, the valuation of $1 B clearly indicates another bubble is brewing. Stay tuned …….
really - 370 employees? Do 300 of them deal with the account locks for too many “i don’t know him”’s days after they occur? Wow. That’s a lot of people for a site that doesn’t appear to have made many front end changes (don’t know about the back end) in a while.
I don’t really use LI any more as it’s been run over by recruiters. I might use it to look someone up as sort of their official professional profile but overall I don’t use it much. Data is too sparse and it’s too hard to get to folks (hate bugging other people for an “intro”). I’d rather look up their blog or site and drop them a line directly.
Congratulations. That’s great news for the business networking industry.
Business networking industry? That’s a new one…
Wow - funding at a billion dollar valuation while the rest of the market has dropped 30% or more in the past 3 weeks. That’s about as big a joke as Facebooks $15 bil valuation on $300mm in revenue.
Althought I do like the site - that value is whacked.
I’ve been a user on Linkedin for quite sometime, nothing has really changed and I’m consistently getting hit with head hunters. With 370 employees and major funding you think Linkedin would have built tons of features and tools for their users.
So with a $1 billion dollar valuation, we can expect them to do $100 Million in annual ad revenue?
These are probably the same folks who bought houses in Stockton, CA a few years back. Give me a break - pass the crack pipe!
LinkedIN is definitely a site of much value–one has access to the top talent and expertise in the world. The future is also business networks that are vertically based such as in my industry–healthcare, there is Sermo.com (http://www.sermo.com - for physicians) and radRounds.com (http://www.radrounds.com - for medical imaging business leaders, technologists, physicians subspecialized in radiology, radiologists).
Jennifer, would you be kind enough to explain what you mean specifically by “one has access to”? For sure there are many people listed, but they don’t have phone numbers and you only get to e-mail them if you have a connection. To get a connection you either need to invite them to connect with you out of the blue, which you are not meant to do; or use a networking of intermediaries to connect you up, many of whom I find reluctant because they are protective of their contacts if they don’t think my intentions are correct.
The principle works well, but suggestions by LinkedIn that you have a network of hundreds of thousands just because of whom people you know are contacts with is folly. The reality doesn’t reflect that.
Ian Hendry
WeCanDo.BIZ
http://www.wecando,biz
Jennifer, would you be kind enough to explain what you mean specifically by “one has access to”? For sure there are many people listed, but they don’t have phone numbers and you only get to e-mail them if you have a connection. To get a connection you either need to invite them to connect with you out of the blue, which you are not meant to do; or use a networking of intermediaries to connect you up, many of whom I find reluctant because they are protective of their contacts if they don’t think my intentions are correct.
The principle works well, but suggestions by LinkedIn that you have a network of hundreds of thousands just because of whom people you know are contacts with is folly. The reality doesn’t reflect that.
Ian Hendry
WeCanDo.BIZ
http://www.wecando.biz
Linkedin has grown phenomenally over the years. The growth has everything to do with the features this social and professional site has. Linked in has quite bright future in coming years and with kitty under their built site is expected to go places.