Lofty valuations aren’t over for everyone — Ning raises $15M, valued at $750M

July 21, 2009 | Anthony Ha | Comments | |

Ning_logoNing, a startup that lets users create their own social networks, has raised $15 million in a fifth round of venture funding. The news was first reported in BoomTown, and a Ning spokeswoman confirmed the story.

The round, which comes from Lightspeed Venture Partners, doesn’t seem that big, compared to the $119 million that Ning has raised in all. On the other hand, Ning’s new $750 million valuation is very substantial indeed and runs counter to the conventional wisdom that VCs are forcing startups to accept lower valuations. Instead, it’s enough to make you long for those innocent days back in 2008, when we wondered if a $170 million valuation was rather high.

The Palo Alto, Calif., company said in April that its users had created more than 1 million social networks, about 200,000 of which were still active. The company makes money through a $55 premium service and advertising; BoomTown says Ning’s also developing its own advertising platform (it currently uses Google).

Ning last raised $60 million at a $500 million valuation more than a year ago.

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About the Author, Anthony Ha

Anthony is VentureBeat's assistant editor, as well as its reporter on enterprise technology, cloud computing, and tech policy. Before joining VentureBeat in 2008, Anthony worked at the Hollister Free Lance, where he won awards from the California Newspaper Publishers Association for breaking news coverage and writing. He attended Stanford University and now lives in San Francisco. Reach him at anthony@venturebeat.com. You can also follow Anthony on Twitter.

  • Jenny
    Hey Anthony,

    You lazy little wannabee journalist. Why did you even bother with this article? You should have just published the link to BoomTown. This type of copycat article is why tech blogs suck ass. No additional insight, no investigative journalism, just a rehash of what someone else already published. I bet you paid someone to do your homework in high school too. You should be ashamed of yourself.
  • Hi Jenny, since you're so big on original reporting, maybe you should email Kara at BoomTown and see if she thinks I ripped off her work?
  • berry zito
    Dear Angry Jenny,

    Boomtown is not in my RSS feed so I appreciate the regurgitation.

    Sincerely,

    Berry in Beantown
  • berry zito
    you failed to proofread. did the city of palo alto really tell you about the number of Ning accounts created? please try harder because i like venturebeat and you're not helping credibility. maybe you and dean should edit each others posts since you both seem too busy to proofread?
  • Thanks for catching that, I've fixed.

    That said, if you're seriously looking for a news site without typos, well, good luck. I don't think it's a secret that some of our stories, particularly those on breaking news, don't get edited until after they're published.
  • berry zito
    I'm just looking for a bit more effort. For example: "I don't think that some of our stories....don't get edited until after they're published". So if I translate the double negative does that mean you think some stories do get edited? Or that some stories don't get edited? Ugh. Repeat after me: Proofreading is good. Proofreading is good. Proofreading is good.
  • Ouch. I suppose I was asking for that. I'll note that by the time you'd posted your reply, I had already corrected the comment, but that doesn't make me feel (or look) any less sheepish.

    As for your little mantra -- as I implied earlier, we proofread our posts, and they're also edited by another VentureBeat staffer. That usually happens before publication, sometimes it's after, and yet typos still slip through. However, if you'd prefer to assume that we just throw stories up without reading them, don't let me stop you.
  • berry zito
    Fair enough. Its free content and you get what you pay for, as they say. ;O)
  • Pretty cool to see a commenter and her alter ego within the same post. We just need one more and can call this "The Three Faces of Zito"
  • berry zito
    If you're suggesting I'm the "Jenny" character I can assure you that's not the case. I have no problem with regurgitating stories...that's what blogging (and "web 2.0") is all about. This was just the post that finally prompted me to comment on what seems to be an increasing pattern of failure to proofread. I'm off the soapbox now and do appreciate the VB folks bringing me the news.
  • Pretty cool i think it is useful. Get more useful news at www.theventurepost.blogspot.com
  • Andy
    Lofty valuation has never been over.

    If facebook, a company that has never made a single cent in 5 years of existence and has no guarantee of ever doing so, can gain a valuation of $15B or $7B or whatever, then Ning at $750M is downright a bargain...
  • All this shows that Andreesen is the master at pumping up valuations on poorly performing assets.

    Even if you believe that the 200,000 private social networks are active, how many are actually willing to shell out for premium service? I would venture a guess of 1-5%. Even if we assume 10% that is 20,000 willing customers at $25 pop (this price is from their blog), that is 500K per month. Let’s not forget that they also make money selling ads. Assuming they can make $.20 per user* on 2 million users, they would take in another 400K /month, for a total of 900K/ month or $10.8 M per year.

    As for expenses, I am not privy to their numbers but I can guess that between employees and servers, they are probably losing money at least as much as the revenue stream.

    So to recap the math, $750M for a company that makes less than $20M a year (using generous assumptions) with little prospects of turning a profit. Do I hear “Bubble 2.0” popping?

    *Raj Kapoor (Managing Director at Sillicon Valley’s Mayfield Fund) estimates that that the big social network sites make $.20 month per user on ad sales (source: http://www.undertheradarblog.com/blog/social-ne...).
  • alyssa09
    hi