Last week, Jeff Bezos made $2 billion in one day, courtesy of a massive spike in Amazon shares. That gives him more money to plow into the likes of Aviary, a Long Island-based company that makes design software. The Amazon CEO has made a second investment in the company as part of a $7 million round led by Spark Capital.
Here’s a good way to get your hands on scarce venture capital money: Create a start-up geared around Twitter-like “real-time” sharing and conversations. The newest entrant: Hot Potato, a buzzy start-up that’s supposed to let users converse about a particular event, whether they’re attending it in person or watching from afar. When it’s up and running, that is. The five-man crew doesn’t have users or a product just yet. But it has just raised around $1 million.
Not included in the long list of investors betting $100 million on Twitter today: Union Square Ventures, one of the messaging service’s most prominent backers. What happened? Best guess: The $1 billion valuation priced the early investor out.
Daylife, a news aggregator that launched a few years ago with a good deal of hype but has since retreated to the back pages, has landed another investor: Getty Images has bet $4 million on the company, which has raised some $12 million to date.
Web video companies that wanted to take on YouTube are having a very hard time. But Web video isn’t going away, either, and there has to be some way to make it work for users, publishers and investors. Right?
Hence, another round of funding for 5min, a video start-up that just raised a $7.5 million B round. New investor Globespan Capital Partners led the round, and Spark Capital, the VC shop that has made several video bets (along with a big one in Twitter) made a second investment.
Here’s a funding story you don’t see often, recession or no: A start-up buying back its shares from its venture capitalist, at a premium.
But that’s the transaction that video-chat firm Paltalk and Softbank have completed. Paltalk, which sold off 20 percent of its equity to Softbank for $6 million in 2004, has bought the shares back. No one has spelled out a purchase price, but I’m told the deal will be considered a “single” for Softbank–it gets its capital back, plus a return–which in this economy ought to be a home run.
We’re used to seeing Google vets leave for Facebook. Now they’re headed to Twitter.
The buzzy microblogging service has just grabbed its highest-profile Google exec to date: Alexander Macgillivray, a deputy general counsel at the search firm, is coming aboard as Twitter’s top lawyer.
Just a few weeks after a very public breakup, Warner Music Group and Imeem are getting back together again. Warner, which told investors last month that it had written off the $16 million it had invested in the Web music start-up, plus another $4 million in debt, has made a new deal with the company and will get another slug of equity. The big difference–this time, Warner isn’t cutting Imeem a check.
Here’s a scoop from Silicon Alley Insider, published this morning: “Gawker Media announced last night that it acquired BloodCopy.com. It’s a blog about vampires. Really.” No, not really. The business blog got tripped up by a promotional campaign for “True Blood,” HBO’s vampire melodrama.
Here’s the newest twist in the Facebook valuation/funding saga: Russian investors have reportedly offered to sink up to $350 million in Mark Zuckerberg’s social network–at two different valuations. The Wall Street Journal says investment group Digital Sky Technologies has offered to spend $200 million on a chunk of the company’s preferred stock at a $10 billion valuation, and is also offering to buy up to $150 million worth of the company’s common stock at a $6.5 billion valuation.
Nope, Twitter still hasn’t trotted out a business model yet, and that may or may not be a problem for potential acquirers like Google or Microsoft. But it’s a nonissue for a growing number of start-ups hoping to succeed simply by positioning themselves in Twitter’s general vicinity. Today’s example: StockTwits, a day-trader-meets-Twitter site that just raised $800,000 from venture capital firm True Ventures.
Yes, investors are still betting on Web video. Just not in the way they used to: FreeWheel, one of the buzzier online video start-ups you’ve never heard of, has raised a $12 million C round from Battery Ventures, which had provided financing for the company’s first two rounds, and Foundation Capital.
Yes, everyone who invested in Twitter and everyone who runs it wants to figure out how to make money from it one day. But for now, Twitter’s growth–now pegged at 131 percent a month–is the real story.
No one wants to pay for music on the Internet. But starting a free music service on the Web takes a whole lot of cash. Just ask the folks at Seeqpod, which filed for Chapter 11 bankruptcy protection last week. The company’s biggest expense: Lawyers to help it fend off copyright lawsuits from the big music labels.
What’s the value of a service that takes a long Web address and makes it shorter–but doesn’t have a business model? Several million dollars, according to investors who have just sunk $2 million into bit.ly, a start-up incubated by the Betaworks gang.
Peter Kafka has been covering media and technology since 1997, when he joined the staff of Forbes magazine. Most recently, he has been the managing editor of the tech and media Web site, Silicon Alley Insider. Read more »
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