Zynga Raising $500 Million at $10 Billion Valuation

http://kara.allthingsd.com/20110217/zynga-raises-500-million-at-10-billion-valuation/

by kiriappeee • 15 years ago

40 18 15 years ago

kara.allthingsd.com

guelo• 15 years ago

The round includes big institutional investors Morgan Stanley, T. Rowe Price, Fidelity Investments

Oh gawd, here comes Wall Street again, they ruin everything. Bubble 2.0!

astrodust• 15 years ago

I can't wait for the AAA-certified "Startup-Backed Financial Instruments" that they can sell to all the pension funds they didn't totally bankrupt the first time.

robryan• 15 years ago

Actually easier to obscure the true value of a startup than a mortgage, might be onto something there.

Charuru• 15 years ago

But it's only 10 times revenue.

r00fus3• 15 years ago

$10B valuation? This is unreal. On what is this valuation based other than "comps"?

How did valuation against comparables work to match reality for the real estate bubble?

patio112• 15 years ago

Zynga has revenues in the hundreds of millions, based on "You pay us money and we pay you pixels." They have had explosive growth. Betting on that growth to continue, FB to not bleed them dry, and users to continue loving their product is a bet, but it isn't crazy like saying a pet food company which loses money on every shipment would make it up in volume and hit the same valuation.

r00fus3• 15 years ago

Ok, lets get serious here. $10B valuation / $250M revenue/year = 40x multiplier.

Do people really think that Zynga is going to continue to deliver for years and years to come?

vessenes• 15 years ago

10X Revenue is roughly the market price for SAAS model companies. The general perspective is that Gross Margin is frequently in excess of 80%; in that world, you can spend marketing and sales dollars with abandon and still make money.

By the way, this is roughly how SalesForce is valued -- they turn a very small profit (100 or so P/E), and roughly an 8 to 10x P/R. I think of those prices as 'sold on the growth vision' but not egregious.

r00fus3• 15 years ago

So Zynga have $1B revenue/yr by your metric? I somehow doubt they're that high... so hence the more unrealistic multiple based on other unreal valuations (ie, comps).

amchang• 15 years ago

I think it could be realistic. You have to think about the size of their user base and how much money they must be earning through each of the users. Their user pay rate must be fairly high too, I'm guessing 20-50% of their users pay at least some form of money, where most companies that that offer any freeium service usually is 10% or less.

tsotha• 15 years ago

This is just more proof that if God actually exists he probably hates us.

oceanician• 15 years ago

Yes, there is no boom!!! WTF!!

Kilimanjaro• 15 years ago

Is zynga making more money than facebook?

Zynga Raising $500 Million at $10 Billion Valuation

Related Stories