$1 Million In Revenues, $200 Million Valuation
So what is wrong with this picture? Are we living again in the dot com boom? Sure seems like it.
Via TechCrunch :
Web chat startup Meebo has been working with investment bank Montgomery & Co. for the last few months to either find a buyer or raise a big new round of financing. The rumor was they were looking for a $250 million valuation.
A couple of sources have told us that eBay, Fox/MySpace and AOL all took a long look at the company, but ultimately passed based on the price and the fact that the company has done aggregate revenues since launching of only $1 million or so.
So instead of selling, Meebo is closing a financing round valuing the company at $175 - $200 million. The company wants strategic investors as well as the inevitable private equity funds that would be willing to pay this kind of valuation (traditional VCs won’t touch a deal like this). The rumor is that Fox and/or AOL may be investing in the round.
A lot of buzz and a massive user-base today seems to be more important then revenues and profits however, can a company keep their investors happy with eyeballs and no real revenues? Would you invest in them? or would you not? As an investor in a number of web ventures I find it extremely speculative to invest in such companies.
Source: Posted on TheConceptualist by Sahar Sahid — Reprinted with permission — April 10, 2008