In 2005 Accel invested a small part of that fund – just $12.7 million – in Facebook. In exchange they got 11% of the company, and a lot of derision around Silicon Valley for paying such a ridiculously high valuation for the fledgling startup.
Fast forward to today, though, and no one’s laughing any more. The firm sold part of that investment, less than 20%, at a $35 billion valuation. That brought in half a billion dollars or so in cash, paying back the entire capital base of the fund in one transaction.
When Google went public in 2004 it was then valued at $27 billion, Making Sequoia and Kleiner Perkins, with around 10% ownership each, very happy. Accel just beat that in a private sale. And the value of the remaining 8% or so of the company they own is worth around $3 billion at that valuation. All from a $12.7 million investment.
And that’s not the only winner in that fund. Fund IX also invested in Admob (sold to Google for $750 Million), Xensource (acquired by Citrix for $500 million) and Zimbra (acquired by Yahoo for $350 million). Ongoing investments from that fund include rightcove, Glam, Yume, Webroot, OpenX, Trulia and others.
And that’s just Fund IX. Fund X, a $520 million fund raised in 2007, has invested in Groupon, Diapers.com, Etsy, Cloudera, Modcloth, Atlassian Software, SunRun and Squarespace.
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Authors: Michael Arrington