Category Archives: Jafco Ventures

Meebo raised $25M on reportedly $200M pre-money

The rumors were lately that Meebo failed to sell and that’s why it went into this new round of funding instead and not at the initial $250M pre-money valuation they were hoping for but at $175 – $200M (as it seems $200M). Some sources claim that companies like Fox/MySpace and AOL have taken a long look at the company, but ultimately passed based on the price.

A couple of days ago it went official that Meebo has taken a $25 million third round of financing from Jafco Ventures, Time Warner Investments and KTB Ventures. Previous investors Draper Fisher Jurvetson and Sequoia Capital are said to have also participated.

With this round Meebo’s only exit might be the IPO road, which for a company with little to no revenues is not that easy to accomplish. If the new investors are looking for 2x or 3x their money at the exit it would be hard for Meebo to sell itself out for anything less than $500M or go for an IPO, which for a company with little to no revenues is kind of unbelievable for us to happen.

Meebo is a popular and rapidly growing web based instant messaging start up that was backed up by Sequoia Capital and is said to have roughly 4.6M unique visitors per month according to comScore’s publicly available stats. That’s valuing each of their visitors at the $54 mark, which is significantly more than what AOL has just recently paid for each of Bebo’s 22M visitors – $39 according our simple math. Many industry experts, commentators and bloggers have expressed their negative feelings about the potential deal and more concrete about its pre-money valuation. Anyone remember Slide and their pre-money valuation of $500M? Yet it was said then they had over 150M or so users worldwide, which, if true, valued their users at the $3 range.  

There is however something most of the technology blogs seem to have overlooked. Joshua Beil from Level 3 Communications has commented on one of the tech blogs that Meebo’s per user valuation could change quite substantially if one takes into account their unique visitors of the MeeboMe rooms widget. I’ve seen, he says, numbers in the 10-14M range and counting for just this application. Factor this in to the 4.6M uniques to and it’s at a discount to Bebo. We have no idea where he does take his numbers and what his affiliation with the company is, but if we take those numbers for real the $250M valuation does not sound ridicules anymore. In addition to that Venturebeat reports that Meebo has attracted 29 million monthly unique users worldwide, but they also say that some investors remain quite skeptical about Meebo and their business model. We have no clear idea where Venturebeat has come to that number of visitors.

Meebo launched in September 2005 and received funding from Sequoia Capital in December 2005 and Draper Fisher Jurvetson in January 2007. Today, Meebo’s users exchange over 100 million instant messages daily.In early 2007, Meebo gets another $9 million from Draper Fisher Jurvetson and Sequoia Capital. Skype’s lead investor and YouTube’s lead investor are teaming up. Tim Draper, one of the early investors in Skype, did the deal for DFJ. Meebo’s total funding is now $37.5 million.