Slip-Sliding Into a Fortune
It’s Bubble Time!
As BoomTown broke the news in its post earlier today, Slide grabbed a big pile of cash from new investors–$50 million from Fidelity and T. Rowe Price–which puts the value of the company at $550 million.
In our post, we said the San Francisco start-up, whose widgets are among the most popular on Facebook and MySpace, was completing a round of funding that could value it at many times a multiple of its most recent $60 million to $80 million valuation.
The investment from the pair of private equity funds gives them a 9% stake in the maker of widgets and other social-networking applications.
Allen & Co., the media-connected New York-based investment firm, helped Slide execs in raising the latest round.
Don’t think we did not notice that the venture investors already in Slide did not pony up more funds at this–let’s just say it, shall we?–crazy valuation.
But it is noticeable that such mainstream investors are jumping into the giant pool of Kool-Aid that the social-networking industry has been swimming in over the last year.
Slide’s last round–an investment of $20 million–took place in November of 2006 with investors that included Khosla Ventures, BlueRun Ventures, Founders Fund and the Mayfield Fund.
So Slide’s investors, of course, were smart to get in on the ground floor to take advantage of the bubble that is expanding at alarming rates.
The ground-zero of that trend came when Facebook got a $240 million investment from Microsoft that valued the company at $15 billion.
Of course, while garnering revenues, neither Facebook nor Slide has the kind of business yet to deserve being worth this lofty amount, except for the fact that investors are counting in its potential and recent quick growth.
Slide’s business plan includes making money from selling premium versions of its widgets, as well as selling advertisers on its large, although disparate, audience.
The company calls itself the “largest personal media network in the world, reaching more than 134 million unique global viewers each month and 30% of the U.S. Internet audience.”
But the company recently said reports had put that number at 144 million, excluding its 50 million users on Facebook. Its competitors include other widget-makers like RockYou.
Slide makes a wide range of software, called widgets, that have been attracting many millions of users each. They include everything from slide shows to a program called SuperPoke that allows a user to, well, poke another in a super way.
A lot of Slide’s current growth has been through taking advantage of the huge spike in users first at MySpace and now at Facebook, which is promising, but also not certain.
To say that we have seen this story of fast growth, insane valuations and then the inevitable drop-off would be an understatement.
But Slide Founder and CEO Max Levchin and his team consider the company to be a new kind of distributed content and application company that is not dependent on large platforms like Facebook and MySpace and has huge potential.
Minor blogging annoyance: Of course, in a fit of pique since we revealed the funding without their help, Slide hand-fed the details of the deal to the New York Times and BusinessWeek, both of which somehow forgot to link to our post that said Slide was landing the deal. (Brad, Sarah: Please, please don’t tell us you figured it all out on your own this morning over eggs.)
UPDATE: A New York Times deputy tech editor just wrote an email to tell me its reporter already had a “previously scheduled” meeting with Slide about the deal–like I said, hand-fed!–this morning, which “inspired” its post and did not know of BoomTown’s news of the funding (even though it was up since 12:06 a.m. and noticed by everyone else, including Slide). Also, they had the hand-fed details! They did! I admit it! I went hungry, since I did not agree to an embargo! “In light of this we didn’t feel that a link was warranted,” he wrote me.
But we’re not bizarrely ungenerous like that, so here is the link to the New York Times story, in which Slide’s Levchin said his company makes Facebook and MySpace worth using. (And here is the BusinessWeek link too.)
“It’s impossible for social networks focused on scaling the network itself to build all the niche applications that bring people and keep people on these sites,” Levchin said, noting Slide widgets “add the bulk of perceived value to the consumers of these Web platforms.”
He also said he would use the money to expand its repertoire, but said Slide would try to develop in-house.
But others close to Slide said this was not exactly so, and that the company would also look around for good acquisition targets, using stakes in the newly valued Slide as currency.