LinkedIn To the Big Cash: Looking for $13M

So LinkedIn is finally making money….. Hand over fist. The company is projected to reach revenues of over $60M this year - it turned profitable for the first time, in the early part of 2006.

So why is the company now looking for Series B funding, that too for the paltry sum of $13M (they are reputedly close to sealing the deal)? The speculation is that the company is either being prettied up for an acquisition or they have huge expansion plans in the works. Clearly, either way the company would have nowhere to go but up.

With social type sites like Facebook and MySpace reaching ridiculous valuations, LinkedIn with its niche business focus is actually being considered as having a “reasonable” valuation at $250M. Besides, even with its 9 million members, LinkedIn still has room to grow. And no doubt it will discover new revenue streams as it flows along. Already, the company is generating decent cash flow from its premium memberships, subscriptions from large companies who use LinkedIn for recruiting (45% of revenue), and from job postings.

And lastly, there is the financial backing. In Series A, the company raised $4.7M led by Sequoia. Series B was $10M, raised in 2004 with Greylock Partners (of Red Hat & Ascend Communications fame, amongst others) leading the charge. Most notable, however, were the whos-who list of 14 Angels who also participated in that round - including Marc Andreessen, co-founder of Netscape, Joe Kraus, co-founder of Excite, Josh Kopelman, founder of Half.com, and Peter Thiel, co-founder of PayPal. With a celebrity list like that standing behind it, my money would be on LinkedIn making it really big!

Company: LinkedIn
Comany location: Mountain View, CA
CEO: Reid Hoffman
Funding received: $14.7M in Series A, Series B
Investors: Sequoia Capital, Greylock Partners
Angels: Marc Andreessen, Co-Founder of Netscape and Chairman of Opsware,Andrew Anker, Co-Founder of Wired Digital and EVP of SixApart,Andrew Beebe, former CEO of Bigstep and President of Energy Innovations, Robert Clarkson, former COO of CKS Group and Partner at Jones Day, Rob DeSantis, Co-Founder of Ariba, Tom Gruber, Founder of Intraspect Software, Josh Kopelman, Founder of Half.com, Joe Kraus, Co-Founder of Excite and CEO of JotSpot, Loïc Le Meur, Founder of French startups RapidSite, B2L and Tekora, Jun Makihara, former Managing Director of Goldman Sachs Japan, Sunil Paul, Co-Founder of Brightmail and Freeloader, Gil Penchina, VP International at eBay, Peter Thiel, Co-Founder of PayPal

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3 Responses to “LinkedIn To the Big Cash: Looking for $13M”

  1. By Barkham on Jan 27, 2022 | Reply

    I didn’t realize they had a rev of $60M. They have about 10M users, and typically about 1-2% are paying members. Assuming 1.5% paying members gives a revenue of $40M, so that makes sense, it is in the ball park.

  2. By Priscilla on Jan 29, 2022 | Reply

    Looks like Techcrunch wrote about it today. The deal is done, as expected. http://www.techcrunch.com/2007/01/28/linkedin-raises-nearly-13-million-more/

    Since the company is going to do IPO pretty soon, its a low risk investment. Do you know what did the investors get for $13M? I guess with $250M post money valuation, its about 5%. Lets follow them to see how they make out after the IPO.

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