Posted on 01/29/2007 6:48:15 PM PST by nickcarraway
LinkedIn, the fast growing business networking site announced Monday that it has closed on $12.8 million in financing from Bessemer Venture Partners and European Founders Fund.
The new round of funding will be used to conduct “forays into new markets” in Europe, testing out new ideas to gauge user interest, said Keith Rabois, VP of Business and Corporate Development at LinkedIn.
This is the third round of funding for the Palo Alto, California-based company, whose CEO, Reid Hoffman is himself an angel investor in many Silicon Valley tech companies. Previous funders Sequoia Capital and Greylock Partners have put $14.7 million towards the company since its founding in 2003. (See: VC Action)
LinkedIn is by far the best known business networking site in the United States, but it has yet to saturate the European and Asian markets. With 2.5 million users in Europe, it nevertheless lags behind competitor Xing (OpenBC) in Germany.
To remain in the lead against its competitors—both known and unknown—the company must continue ramping up, said Phil Leigh, Senior Analyst at Inside Digital Media.
“The pot of gold at the end of the rainbow is to become the MySpace of professional business networking,” said Mr. Leigh.
Indeed, Mr. Rabois said the funding round was more about networking with well-connected VCs than garnering more cash for well-capitalized LinkedIn.
The European Founders Fund, based in Munich, Germany is run by brothers Oliver, Marc and Alexander Samwer. The three entrepreneurs have launched some of the better known European start-ups, including eBay Germany (Alando), Leadpoint and LokaListen. Menlo Park, California-based firm Bessemer Ventures, meanwhile, has backed such winners as Skype and Verisign.
LinkedIn is one of only a handful of Web 2.0 companies that is profitable—something it achieved last March. Revenues are drawn not only from advertising, but also from premium services, for which customers pay directly.
LinkedIn’s network has 9 million users in North America, Asia and Europe, and is growing at a rate of 100,000 users a week. Last year at this time, the network had 4.5 million users.
Mr. Rabois said the company has become the standard place to make business connections and remain relevant, particularly in Silicon Valley.
“If you’re not in LinkedIn you’re committing professional suicide,” said Mr. Rabois.
The test will be whether Europeans and Asians feel the same way.
The writer, Sunshine Mugrabi, does have a LinkedIn account.
Great job hunting resource. Invaluable.
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