Update #2: Six Apart, the San Francisco-based start-up behind TypePad, MoveableType and Live Journal is rumored to have raised another $12 million in Series C financing, according to a report in Investment Dealers’ Digest. The names of investors have not been disclosed. (I am burning up the phone lines to find the details!) The report says that the funding has come from three undisclosed investors, and hints that one of them might be Intel. Paul Kedrosky adds his two cents.
While I have not been able to speak with anyone from Six Apart, some of my sources in Silicon Valley are telling me that this one is rumored to be a hotly contested deal. The pre-money valuation was said to be around $80 million when Six Apart started raising money, but since then it has become a hotly contested deal, and the pre-money valuation is said to have climbed north of $100 million. Sources say the funding round hasn’t closed as yet. I am going to qualify all this as a rumor since I have not spoken to Six Apart folks. And when I do, I will update the story accordingly.
In recent months, the company has been taking it on the chin mostly because of infrastructure issues. I bet a lot of money, if it has been raised, will be spent to upgrade the infrastructure. And of course there are 90-plus employees. Those familiar with the company say Six Apart’s revenues have tripled in last 12-months. (Take this last bit with a grain of salt… however!) There is a pending launch of a new enterprise focused product, which could further consolidate SixApart’s position as a core Web 2.0 infrastructure player.
The big question is what is the exit for Six Apart. An IPO? That would make sense given their subscription model layered on top of hot-new trend of blogging (at least from Wall Street perspective) and possibility of another “eyeball” revenue stream. But what if no IPO happens? Who buys them? My bet is that it won’t be someone like Yahoo, because the deal is already too rich for Sunnyvale gang. The best fit would of course be someone like News Corp. All that is still idle speculation on my part, so disregard it. Too much coffee this morning!
It would be great to hear what Six Apart team has to say!
Update: Rodrigo crunches the numbers on Six Apart and estimates that their valuation could be 6.6 times sales, not too much considering that revenue less companies like FON just raised $21.7 million at a much higher multiple.