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LinkedIn gets the Cash-In

Alex Christie

18 June 2008

Linked_in

Networking site for professionals LinkedIn has stamped confidence in online industries today by attracting new investment to the tune of $53m. The business overall is valued at over $1bn.

At an uncertain economic time, this is a reassuring statement that there is sustained confidence in online industries. Perhaps this is due to the fact that LinkedIn manages to monetise their site in ways that other sites don’t or can’t. Not only does the professional networkers site run the typical online advertising model, but they also charge a subscription for employers and individuals alike to have an enhanced membership of the site.

LinkedIn has attracted investors from the likes of Sequoia Capital, Bessemer Venture Partners and Greylock Partners, as well as Bain Capital Ventures, giving investors a 5% stake in the company. This is the latest in 4 rounds of fundraising throughout the company’s 5 years, totaling an investment of $80m.

It seems that the investors are attracted towards the sites 23 million strong user base, and reports that growth figures are as high as 1.2 million new additions every month, as well as the differentiation that the site offers – being a specialist for recruitment.

New investment such as this at this difficult time suggests that there are an array of firms who remain committed to investment in developing companies – and not just online industries, but social networking companies. Does this suggest that they believe there is room in the market beside the dominant firms such as Facebook for a specialist to prosper?

The interest lies in how LinkedIn invest their new capital, and the routes they choose to explore in order to maintain the confidence they have gained in the business they have carved into quite a significant niche.

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