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Summary:

Mike Moritz, general partner with Sequoia Capital has a habit of investing in high growth consumer Internet properties, putting business model on the backburner and instead focusing on market share. He did it with Yahoo, and then with Google. (Okay we won’t hold Plaxo against him […]

Mike Moritz, general partner with Sequoia Capital has a habit of investing in high growth consumer Internet properties, putting business model on the backburner and instead focusing on market share. He did it with Yahoo, and then with Google. (Okay we won’t hold Plaxo against him just yet.)

In fact this is the investment philosophy that drives Sequoia Capital’s consumer facing investments; one that has made them the big daddy amongst Silicon Valley VCs. (YouTube-Google is further proof, but that’s a well known fact by now.)

That is why it is interesting to figure out his next big play. And it is PopSugar, a site that is one of the fastest growing properties on the Internet. Disclosure: PopSugar’s parent company, San Francisco-based Sugar Publishing was started by two-and-half of my very good friends, Brian, Lisa and Katie Sugar. I apologize for intruding on your time.

The news of the investment first appeared here, and since then we have been scrambling to get some details. The focus of PopSugar is a demographic that is attractive to consumer advertisers – women. Moritz has invested close to $5 million in the company. Brian Sugar, who runs the company declined to comment and offer further details. (Michael Arrington and I had to share our resources in digging up information on this one.)

What is amazing is that PopSugar started as a lark! It was at a BBQ for Oscars, when I had casually asked Lisa why doesn’t she put all her knowledge about celebrity gossip to good use, and start a blog. Who knew she would take it seriously, and well, now PopSugar has close to 1.5 million visitors a month. They have plans to launch a series of other web properties and staying focused on the same demographic.

Sugar Publishing is not the only start-up going after the same demographic. Accel Partners has funded Glam. Most of these new companies will be going up against already established brands owned by CondeNast and Time Warner. The old media titans are being proactive in protecting their turn, and turning their consumer/women brands into Internet brands.

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  1. It’s really hard for me to accept the fact that popsugar is worth the 5mil. How did they come up with the valuation.

    Om… you’re from B2.0 and I think you should be familiar with the article that B2.0 published just a while back about 10 ideas VC are looking to invest.

    They are looking to drop 1-2mil on ideas that is seem more complex and high tech than popsugar is doing.

  2. It doesn’t sound like they’re purchasing the site, but rather investing that money into the company to spend on marketing / infrastructure / partnership deals as opposed to just rights to own the company.

  3. one of the fastest growing properties on the Internet

    I know trying to judge a website’s traffic growth from toolbar vendor’s data is not accurate but still popsugar.com is flat in ask.com’s websearch ranking

    http://ranking.websearch.com/TrankTrend.aspx?url=www.popsugar.com&period=3&size=1

    Alexa shows slight growth but hey everyone knows its skewed towards the geek demographic.

  4. ..and business model? how will Sequoia and other investors get a return?

  5. This is great news for blogs!

    BTW, comScore Media Metrix reports PopSugar has 400,000 UNIQUE VISITORS not 1.5 million- and declining month to month???

    May be 1.5 million total visitors (not unique) That makes PopSugar one of the good blogs but way behind some great ones with larger reach. You check out are: USWeekly Blog (3x PopSugar) JustJared (2x PopSugar) TheBosh (2x PopSugar) and the People Magazine Blog.

  6. Sequoia must see that the very same big media players PopSugar competes with now make excellent potential acquirers.

    CondeNast et al could buy Sugar Publishing and, in one fell swoop, acquire a hip, new vehicle for its clients to market through.

    Blogs are about content, not platform. That would make it an easy acq. for big outfits already experienced in managing a portfolio of hundreds or thousands of different titles.

  7. @ Khang Toh
    It’s really hard for me to accept the fact that popsugar is worth the 5mil. How did they come up with the valuation.
    They are looking to drop 1-2mil on ideas that is seem more complex and high tech than popsugar is doing.

    Web business is more viral marketing than pure technology. Even Google is not valuated solely after its technology. What was the difference between Google Videos and YouTube? Technology? No.. Only marketing success, and they valuated it at $1.65B.

  8. There’s Lot of Ad Pie for the Rest of Us…

    More evidence of the Google Juggernaut comes from an eMarketer report that the search behemoth will account for 25%, or $4-billion, of the U.S. online ad market this year. That’s truly impressive and explains why Google sports a market capitalization …

  9. Sugar Publishing Buys ShopStyle, Changes Name « GigaOM Tuesday, September 25, 2007

    [...] Brian Sugar have turned their little hobby, PopSugar, into a full blown publishing company. With backing from Sequoia Capital and NBC, Sugar Publishing has become a leading destination for young [...]

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