Confirmed: LinkedIn raises $53 million at $1 billion valuation and plans to buy smaller companies before going public
June 17th, 2008
LinkedIn has recently raised a $53 million round of funding from Bain Capital Ventures, Sequoia Capital, Greylock Partners, and Bessemer Ventures. The investment values the business social network at just over $1 billion. As part of the deal, Jeff Glass of Bain Capital Ventures – the newcomer to LinkedIn’s investor list – will join the board. Speculation has swirled around the Mountain View, Calif.-based business social network, which has rejected multiple acquisition offers — including offers near the above valuation — over the course of its history. LinkedIn is quite valuable and has gained 23 million monthly active users, and it is making $100 million a year in revenue. The money comes in from paid subscriptions for premiums services, job listings, targeted ads, and its new corporate recruiting products.
Reid Hoffman is clear about company’s future plans. It will use some of this funding to buy smaller companies that can help its users share information better and enter new markets which may include companies building mobile applications and other services. Once LinkedIn feels it has firmed up its “foundations” and is a central hub for business communication, it will go public, Hoffman mentioned he thinks about an IPO when every new quarter comes around but we’re not giving any particular kind of time frame at this time.
LinkedIn is working with other software companies to build out many services for businesses, and is looking at how to expand deeper into business software. Of note, it has been quietly working on its developer platform, which has been criticized for its slow roll-out. For example, it offers a script where business publications can link names of people and companies in articles with their profiles on LinkedIn. That service is being used by BusinessWeek, CIO, and more than 100 smaller publications, the company says. There is more to come on that front, but nothing now. 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.