Venture Wire has reported that Kleiner Perkins Caufield & Byers is purchasing $38 million worth Facebook stocks from other share holders. The venture capital firm has been more or less passive during most parts of the last year when social networking madness was climbing up the ladder. And now, when the rush amongst investors to buy stocks of social media companies is at its best, Kleiner Perkins has $750 million worth fund to invest in social networking companies and is utilising this fund by purchasing Facebook shares.
The interesting thing is the price per share at which the deal is going to hold and the net valuation of the company derived from this. After Goldman Sachs and Digital Sky Technology’s investment, Facebook’s valuation stood at $50 billion. But Kleiner Perkins’ investment values Facebook at $52 billion. This hints that the turbulent character of Facebook stocks is restricted to secondary market only as there won’t be much difference between two venture capital investments. But the fact that Kleiner Perkins is investing at a higher valuation than Goldman Sachs tells us that the demand for Facebook stocks are on the rise.
If we go on a retro mood, the .com bubble chapter would come into discussion. At that time, Kleiner Perkins pocketed millions of dollars by investing into the then startups, which are now the web giants. Comparing to those investments, the present one is pretty small. However, it might be a token investment. Twitter received a massive amount of funding from Kleiner Perkins last year. The amount of investment was $200 million and the investment made Twitter worth $3.7 billion.
Kleiner Perkins is one amongst the two firms, the other is Andreessen Horowitz, which have stakes in major social networking companies. Back in October Kleiner Perkins opened the sFund ($250 million worth) for investing in social startups. Afterwards, they had increased the fund as $200 million was invested in Twitter in December 2010. A source reported that they will continue increasing the Digital Growth Fund in future.