Loopt is in the news today. In addition to getting a nice surge in iPhone downloads after being featured in an Apple TV commercial, we’ve heard that they’ve hired investment bank Allen & Co. to represent them in a sale or financing transaction.
A sale in this economic environment is extremely unlikely, so we’re guessing they’re looking to add to the $13.3 million they’ve already raised from Sequoia Capital and New Enterprise Associates. The valuation on this round is likely to be north of $250 million, say our sources.
Allen & Co. Managing Director Dave Wehner is the guy pitching the deal, say our sources. He’s tends to get results - representing Bebo in their $850 million sale to AOL, Powerset in their $100 millionish sale to Microsoft, Stubhub in their $310 million sale to eBay and (we believe) Ning in their half billion dollar valuation financing round. Among others.
Disclosure: Loopt offers a TechCrunch branded version of the service here.
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MSFT?
i think a financing is more likely. Although a FB or MS acquisition wouldn’t be dumb IMO.
FB or Myspace turning on location awareness wouldn’t be dumb either…don’t you think that might put a dent in a $.5B valuation?
yes.
loopt worth 500 million says allenco {seesmic_video:{”url_thumbnail”:{”value”:”http://t.seesmic.com/thumbnail/jrCwCpmxn4_th1.jpg”}”title”:{”value”:”loopt worth 500 million says allenco ”}”videoUri”:{”value”:”http://www.seesmic.com/video/ol3yA1hc9d”}}}
funny thing is that theres no money knowing where all your chums are at. the future of mobile monetization is the company that can best connect users and businesses with professional services, discounts, forsales, bargains, classifieds, clients, leads and the like. saving money or making money is what users and businesses want most.
LifeLocator.com-where business and pleasure mix
Hahahaha. Why not a gazillion dollar? Great business potential. They can brag about how location based ads are the next thing, but they are still unrealized. To make location based ads work, you need partnerships with local businesses, big advertisers, retailers, and users adoption (users accepting such ads). Non of which loopt has. Maybe Loopt should cut back on their PR and hiring car salesmen to work on IMPLEMENTING their great business plan.
Bedwetters and other idiots who read this drivel daily: some facts for you.
1. Fat boy Arrington promoted Meetro and carried a rumor that Meetro was going to be acquired by Google.
2. It didn’t.
3. Meetro ended up shutting down, very quietly, and its owners were forced to return to Bulgaria where they were resold into the sex trade.
4. Fatter Arrington promotes another social network, Loopt. He shills it b/c he has a financial interest in its outcome.
5. One of two things will happen: Swollen Arrington will explode from overeating;or, Loopt will succeed.
6. Bet on the Fat Man Exploding.
Just trying to figure out their business model. 250 millions for what?
i agree i dont see where they are earning 250 million
biz model is $2.99 monthly charge to show you where all your friends are at and to allow you to update (or hide) your location/status for them to see. incredibly sticky, and they are getting huge numbers of subscribers. i’m surprised to hear the valuation is that low.
you must worked for them
you must also have missed the 40% drop in markets, the sequoia memo and whole bunch of other indicators. $250 million for this company will be the ultimate sign of bubble even in best of times. In current economic conditions, even $100m for these guys will be a joke.
And what happens when a competitor offers all of that for free? Good luck charging these users long-term, need to connect them with local businesses, etc. to monetize.
It’s a clear indicator of Web 2.0 valuation bubble. It will be interesting to see which sucker takes the bait.
$500 Million for Loopt? Are they serious..
I’m still waiting for someone to join the service within a 30 mile radius of me
hilarious, why not post some valuations from 1999 while you are at it MA? no one cares what allen and co or anyone else did last year. the game has changed, the ning valuation is also likewise worthless and laughable. want to buy my stockton townhouse? realtor says it was worth $850k in late 2006!
Loopt is a ‘punchy drunk looped’ with delusions of grandeur.
GET REAL !
f they have over ten thousand downloads daily as you write in your earlier post, that is 4M new users a year. at $3 a month per user that amounts to $144M/year gross. at that rate they should be eminently profitable…..am i missing something?
iPhone is free, I think a very small percentage of total users are paying directly for the app.
“I think.” is not a well researched position. Loopt’s origins are through carriers like Boost, Sprint and Verizon. The iPhone app is new, and currently popular, but the vast majority of people who use Loopt are on the smaller Brew/J2ME phones and on other smartphone platforms.
I don’t know what arrangements Loopt has made that allows the iPhone app to be free and without subscription fees. It’s possible that there is some kind of arrangement there, or an alternate revenue model will emerge to indirectly capture revenue from third parties.
Loopt’s location tech is the unique card, and it’s not a space other sites can easily play in. It takes direct negotiation with the telco providers to get access to the GPS and location information _in the background_. This is different than BrightKite and other services that you have to find and click where you are on a map.
So, they have a revenue stream, and it’s significant. That’s a lot more than a ‘bubble’ company generally shows. However, it’s how they grow the business and expand their advantage that will be key.
This is crazy. The Loopt team needs to refrain from doing crack.
Y Combinator is still searching for a real success story. Reddit walked off with $12 MM. Justin.tv is big but based totally on illegal content - no big company will buy it. Scribd is the same - just based on ripped off content.
Loopt is another joke and a half. Xobni is a disaster - one of the main guys left. No revenue, no business model, no exit now that MSFT/YHOO/GOOG/TWX have wised up.
Weebly is the only really worthwhile company to come out of Paul Graham’s harem of scurvy-infested wantapreneurs.
There’s still Ulocate and Whrrl about - the backbone to all these companies is the core mapping data they use (Tele Atlas/Navteq) and the devices they run on. IMO we’d see an acquisition in the region of $300 million - probably from a company like Nokia…notice that Loopt is not yet compatible with Nokia, but their key competition is. Perhaps they’re ready to pounce…would also make sense following Nokia’s acquisition of Navteq - and the fact that Loopt ditched Tele Atlas for Navteq data.
Loopt will not be able to get back $250M for anyone. If they do try to start charging fees, a free alternative (fb or ms by then?) will easily take them down. A $250M purchase would be for a dumb social network too lazy to compete/create.
http://boottech.wordpress.com/
Folks: Loopt is a fraud. Users on iPhone are not active and it is free. No subscribers on Sprint and Verizon. Why would you announce yourself for sale? This is M&A desperation. Microsoft laughed at them.
Mike - you are the number 1 tech blogger. But, get your facts, man! These guys were burning $1M/mo with zero revenue so they just did a big layoff. This is real news. Raise the red flag on these hype monsters. Just because they are Sequoia-backed, doesn’t mean you should cut them slack.
Deadpool…
right.
Running a public M & A process is highly irregular. this stinks of desperation
If people are willing to pay for the Loopt service; just imagine how many people would use it if it was completely free - lots. Still room for Loopt to improve in the location based advertising field - a huge market. Yes, the service can be replicated, but as we all know, FB and MS can also be replicated - and nobody’s interested in switching to an alternative. We’ll see what happens..it could well be financing, but it’ll be interesting to see what price this company eventually exits at.
IT IS FREE ON THE IPHONE!!!!!!
You want FREE? Call the US Government for a BAILOUT.
The Federal Reserve (a PRIVATE corporation) is backing $2 TRILLION dollars of bad debt. And wants YOU to ignore it.
$ 2,000,000,000,000
Change!
Ignore the Crackhead. We’ve dispatched Obamatons to silence him.
Referring to Loopt in general - unless I’m mistaken, it’s $3.99 through Verizon and $2.99 on Sprint and people are still willing to pay for it through them.
Right, but not all of the $2.99 goes to Lopt, or does it?
no!!!! they don’t charge - they can’t!!!!! no one would pay for this shit. gee let me pay money so my friends can find me on their phone - as if they are looking… only losers pay to be found. Popular people pay to hide where they are — were any of you actually popular in high school? or are you just ugly introverted tech losers??
No idea how the fees are split between carrier and Loopt. Who knows what will happen..
Good to see web 2.o valuations are still here…….looks like i will be rich very soon
They only want to sell because Apple featured them in a commercial. They’re trying to sell while the going is still high, sadly this company will diminish soon after their 15 minutes of fame is over.
Well.. it’s not that sad.
Dwayne.
http://probablysucks.com
Unnecessary pessimism…
That’s negative.
Ok, lets do the math:
1- Sequoia releases their famous “Good TImes RIP” deck. Tells portfolio companies its ugly, no capital, valuations down and reduce staff
2-Loopt is a Sequoia company doing no revenues
3-Loopt lays people off (privately, ’cause this would signal weakness)
4- Loopt announces they are “for sale”
Can anyone guess how this story ends…
It ends with the collapse of the US economy.
The Federal Reserve is a private corporation, printing US dollars, like its a fire sale.
Who Cares?!?!?
Sam Altman’s brilliant younger brother is working with us on quantios.com, hopefully we can snag half a billion valuation in the next year
Guys, let’s push back on Mike A. He’s clearly lying to us. I did the first deal Loopt booked when I was an executive at Boost. We spent over $3M on advertising on them on ESPN and other channels. They promised that it would be viral. Is wasn’t. They said our costs would be low, they weren’t (it’s very network intensive). They said Facebook would pay $1B for them and we’d get a lot of glory for being first. They didn’t and we don’t.
A lot of empty promises from their investors as well - particularly the cross-eyed Patrick Chung of NEA.
Furthermore, Allen & Co is NOT rep’ing the deal at $500M or even $250M - they’re floating random numbers to get a feel for the market - the VCs will take $10M to $15M to get out of the deal. Just ask Mark J CEO of iSkoot (why do you think he left the the lying founder?).
Bottom-line: friends don’t want to be found - if they did, they would call you. We wasted in total over $5M for this piece of shit.
More and more I wonder why Mike A lies to us and withholds how he lines his pockets. Thanks Mike - keep up the objective journalism.
Pass the popcorn, please.
That is not someone from Boost. I did the initial deal between Loopt and Boost, and the relationship has been a good one.
Clarification - I was the Boost executive who did the deal with Loopt, and again it has been a good relationship. I can’t imagine “Boost exec” has ever had anything to do with Boost.
I did the deal with Loopt / Boost. It was a bust from the get-to. Both companies are failures. That’s why I bailed out.
lowell please - you guys pushed it through from a brand perspective - you know we made no money in fact lost a lot on the deal. why do you continue pushing this loser?
I don’t understand why Loopt don’t focus on doing some more API stuff. You have a good amount of users, put in a decent API and get developers to use you as a platform.
If you dont do this soon, you will lose your market to the Androids and iPhones because the current loopt functionality become handset integrated. If you build a decent API, they might use it.
What are you smoking Tristan? Cause I need some of that shit…
Did anybody notice the FED is trying to hide 2TRILLION dollars of bad debt?
I didn’t.
Hilarious! Thanks for a good laugh Crackhead.
I believe Brightkite is much better than Loopt however ….
All Facebook needs to do is add Location identification into is existing application and like Steve Jobs says “BAM” + “BOOM” … Loopt, Brightkite etc, are obsolete and out of business.
Finally …. Loopt may have the most downloads - but how many removals! It would be interesting to see how that stat and the actual amount of time a user has it on their phone before they delete it.
On the main carriers - anything other than the iPhone - they do charge. The thing is they don’t get to recognize the $2.99 or $3.99. The carriers take 50% off the top. So the real revenue is $1.50 - $2.00.
They probably only manage to charge for a fraction of their user base - I bet their revenue is in the ~25M range. That said if Allen & Co. is positioning them for a sale they have to be profitable.
Good luck on that $500 million valuation!!!!!
For what its worth, I’m in Seattle, I work for a startup and have about 600 contacts in my address book–only one of them is on Loopt. About 1/3rd of them are on Facebook. Loopt may have been downloaded a lot, but comparing it to Facebook seems a little premature.
Wow, Marcus. You are well-connected. Are you on Linked-in, the fastest-growing social network on the web? Come check me out over there, and tell your 600 friends to connect. Everyone who is someone is there.
“…pitching Loopt at a $500+ million valuation.”
HAHAHHAH… these guys are smoking some powerful sh*t if they think they will get anything near that for an app that offers limited use.
Mike, its due to Sprint sinking fast as that is Loopt’s lion share of sup0port for their server infrastructure and etc via the revenue share deals and etc with Sprint.
Two, there are some low cost competitors coming to Android..I am one of them that Fred WIlson wants to see the demo fo in the next 4 weeks.
Given that there are more innovative wasy to mash up the clouds to do a Loopt clone using Android that valuation will evaporate very soon.
When you do not have to pay the Sprint tax ..its somewhat easier to compete with competitors such as Loopt..
Hmmm .. I wouldn’t be at all surprised to see Loopt on the Android platform. Is it in the Android store yet?
As much as I enjoy reading the bashing in the comments its time to shut off all new comments. Things are getting to personal.
Its a great service and location aware apps are definitely the future but at 500million value? I think that’s a little far fetched
Btw
Check out http://www.jobstaxi/com
New Jobs. FriendFeed. Playfish. Netflix. Connected Ventures. MeetUp. ReverbNation.
“Location aware” Is the most over-hyped idiocy of the last 10 years. It’s ridiculous. It doesn’t solve a problem people have.
No one goes out and thinks “Oh damn I wish all my friends knew where I was”. If they want to hook up, they call/sms each other.
These guys tried to hire me to mentor their developers to write iPhone apps. Suckas gotta pay for that.
Somebody is meme-bombing this post with hysterical rhetoric about the Federal Reserve.
There is no reason to doubt the legitimacy of the Fed. The $2,000,000,000,000 worth of bad debt they guarantee is absolutely RISK FREE.
The US Congress (despite an approval rating <10%, lower than Bush’s), is NOT responsible for the SUBPRIME fiasco.
And Obama’s campaign financing DID NOT disable credit card security measures. Nor did he take illegal contributions from FOREIGN DONORS.
Somebody silence this liar. Fast.
Question, is anyone aware the percentage of their customers who are on failing Sprint?
Its over 50%..this is a sale preparation set up..I woudl look for a Android CDMA Mobile Operator announcement as the trigger behind this announcement..Say Sprint’s competitor Verizon..
Hey there Loopt, let me introduce you to my good friend, the year 2008. Oh, you haven’t met? Well, I’ll leave you two to get acquainted.
What’s that chomping sound?
OMG! Loopt is valued at $500M!!! Where’s crack-head Tyrone Biggums from the Dave Chappelle’s Show when you need him?
Yeah that is a pretty cool app. I have it on my iphonee
This company has raised a minimum of $20m and is probably burining $1m a month. Deadpool!
Loopt has no road map. On one hand they tried to be Facebook with location. What would happen if Facebook ads location? They are done.
Now they’ve added finding people like the iPhone App WhosHere. But they are thousands of users behind WhosHere.
So they’ve got an undefensible front on one side and are playing catchup to a lean an efficient startup on the other. WhosHere is probably already profitable with like a handful of people, Loopt plays catchup at $1 million a month burn rate.
Let’s see here…Wehner got $310M for StubHub in January 2007 when according to public sources it generated more than $100M in revenue…
StubHub competetor viagogo just raised $15M on a rumored valuation of $300M just three plus years after launching while the economy is in the tank and valuations have plummeted… http://www.techcrunch.com/2009.....-seatwave/ Surely viagogo has not yet reached annual revenues of anything close to $100M.
Seems to me that eBay got StubHub for a steal at $310M. Way to go Dave Wehner!
Loopt offers a TechCrunch branded version of the service
Layoffs? I don’t know where you get your information, but from what I can see it’s the exact opposite. Loopt is hiring in all the departments, and actively interviewing people. It looks like a generally happy, growing company on the whole.