Bebo's VC makes $140 million after AOL sale

(No, that’s the not the VC, that’s the Bebo founders on holiday). As part of Bebo’s sale to AOL, Balderton Capital, the VC firm that invested less than two years ago in Bebo, is selling its 15.7 stake in the social net to AOL. It will realise about $140 million, a healthy nine times multiple. It invested $15 million in May 2006. In a statement Balderton partner Barry Maloney, said “We got involved in an exciting and competitive investment in Bebo because we believed in the social networking space and the fact that Bebo was positioned for exponential growth.” He is “pleased” that Joanna Shields will continue to run the business for AOL.
Elsewhere, VC Fred Destin of Atlas Ventures today blogs that Michael Birch (pictured front right, from his Bebo profile) seemed like” an oustanding founder when I met him. From his strategic management of viral development to his unique product roadmap, Michael had what one might call “purity of vision” in how to develop his service, mixing high end maths with a deep understanding of communities.”

I’d agree with Destin – Bebo’s sale is great news for the European startup scene, as it started in the UK and Ireland and subsequently became a key global player.

He also does some back of the envelope calculations which suggest the sale is not over-priced:

40 Million Uniques
40 page views per user per day
48 billion page views a month
50% monetizable inventory
25% inventory sellout
1 ad per page
€1 average CPM
current monthly revenue €6 million per month ?
potential revenue if fully maximised of €50M per month ?
Optimize even some of these metrics over time and you could easily see €300M of revenues in this business at the current scale.

This does not sound like a dumb buy to me.

Remember, social networks represent 13% of young adults attention but only garner 2% of ad revenues. Whether this is recession proof I do not know, but there is a lot of catching up to do.