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Summary:

Glam Media, the online women and lifestyle media and ad-network company, has raised another big round, this time a mezannine round before it…

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Glam Media, the online women and lifestyle media and ad-network company, has raised another big round, this time a mezannine round before its logical next move of an IPO in the next year or so. It has received about $50 million in this fifth round, led by Aeris Capital, the European fund, with existing investors Hubert Burda Media and Mizuho Capital also participating. The valuation, our sources say, is around $750 million post money. This round brings the total cash raised by the company directly to about $130 million.

Out of the $50 million round, about $10 million to $15 million is money taken off the table for early investors and some employees (though the amount is spread across a large number of employees and so is small individually); the rest will be used to build an R&D center to develop its platform and enable display ad innovation, expand internationally, and for strategic acquisitions, CEO Samir Arora told me earlier today. Also, Glam will restart its U.S. expansion plans, which it halted last year due to the economic climate. During the recession, the company says, its top execs took 40-50 percent paycuts, it cut the total number of U.S. employees by 8 percent, and it moved to employee variable pay. Seems that now those numbers will go back up.

The company at the end of Q409 was profitable EBITDA-wise across its various global divisions, which really led to a process where they could either start the work on filing for an IPO, or do this new mezz round, and in the end decide to take the funding money, he told me. Coming next, very likely within the year or early next year: an IPO, though Samir didn’t comment on that. Interestingly, unlike the last big round where it worked with Allen & Co and BofA on the fundraising, this time it didn’t use any banks.

  1. Let’s cut through the spin, folks. No one has the choice between a successful IPO and raising money. This is one of those inside jokes, ya know? Let me briefly explain:

    If you think you can really truly get investors excited enough to buy your story and buy your stock, you will do it. This also means that you have supreme confidence that you can continue to grow and beat your numbers over the following 18 months or so.

    If you are not very sure of this then you take money because the IPO route wasn’t really available to you. You then go out and tell people that you thought long and hard, but eventually decided to dilute the heck out of the company instead!

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  2. Much better to do a round and remain private- specially given the valuation and the tiny dilution raising $50M is for them. Gives them time to build the company to a bigger better public company in the future. Facebook, Glam, Zynga all taking capital and waiting to do a bigger IPO’s in the future.

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  3. I agree that it’s better to stay private if you don’t have the numbers but I am not sure how you know they only suffered tiny dilution. There may have been warrants given or other preferences given that make the actual dilution look higher. They may have also had to increase the employee option pool and so many other things could affect ownership.

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  4. @jenkins, Good point, you are correct — was only looking at valuation and total raised.

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  5. ok folks, this is a simple as, “hey if we keep hinting at an IPO, someone might buy us”. “Hope it happens before we blow our dough.” Sham Media.

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