Valuation Groundhog Day

For those of us who remember deal making back in 1999, 2000 and 2001 I am sure the overwhelming memory was of "dot com" companies who whilst having revenues certainly had no profits and in some cases even revenues were a little thin on the ground.

And then "dot com" mania crashed and burned. There are many who argue that everything is cyclical whether it be the weather, fashions, the economy or even - in the case of deal makings - valuations.

Spotify, the UK-headquartered online music service that was launched back in 2006, is rumoured to be in the process of closing a round of funding that would value the loss-making business at over $1 billion.

If this fundraising goes ahead then it would be the 8th round of funding received by the company since its launch. Previous investors range from private individuals to venture capital firms from as far afield as Hong Kong.

The last filed accounts for the company (2009) show a significant loss, over £16m on revenues of £11m . . . work that one out if you can.

Yet still if we believe what we read the company is having no problems attracting investors or breaking the $1bn valuation figure. If the company does succeed in its fundraising then it really does prove that everything in life is cyclical.
 

Filed under: financing, online, dealmaking