$50 Million to Facebook Application Development Firm

PC Pro, a UK based magazine, is reporting this morning that the Facebook application development firm Slide has secured $50 million in backers. The article boasts that this is 10 times the normal investment in ‘web 2.0′ company.

Currently slide has 65 employees and is looking to expand to 100 by the end of the fiscal year. Slide applications rank as some of the top Facebook apps with an estimated 143 million users. Some of their more popular applications are: Slide Show, SuperPoke and Funwall.

Slide is boasting that they have the growing power to enter the league of developers like Adobe, EA, and Intuit. What I find most interesting about this claim is how none of the afore mentioned companies play in the same field. While the three companies all developers of software, each firm develops software for a very particular user.

I guess that is where Slide is really banking on growth. Most development firms focus on creating software that meets the needs of one group of people. Eventually the software firm expands its market and its user base, but essentially they all grow from a single type of client.

By utilizing the Facebook user base, Slide is able to successfully market to a much larger segment of the computer using population. I don’t know if this market is worth $50 million, but it is interesting to see how VC’s and the market are treating app developers who focus on the Facebook platform.

Do you think an application development firm is worth $50 million. If so why? If not, why not?

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9278 Comments2008-01-21+15%3A08%3A55Nick+O%27Neill »

On paper Slide is actually valued at $500 million by it's investors. Slide is more than applications, they are a widget company. But they have distribution and eyeballs that can be monetized through advertising but they also need the user's attention and engagement which without more metrics is hard to guess. It will be interesting to watch their next steps now that they have the capital to invest in their next big growth areas.

Comment by Rajiv Doshi — January 21, 2008 @ 6:31 am
Slide is a great company. Max has a giant brain. They're playing in a much bigger sandbox than just facebook. This will turn out to be a great investment for all involved. The social web is the next evolution and slide is well-positioned to generate significant revenue. Congrats to max et all on continuing to execute!!!!

Comment by michael lazerow — January 21, 2008 @ 6:35 am
On paper Slide is actually valued at $500 million by it's investors. Slide is more than applications, they are a widget company. But they have distribution and eyeballs that can be monetized through advertising but they also need the user's attention and engagement which without more metrics is hard to guess. It will be interesting to watch their next steps now that they have the capital to invest in their next big growth areas.

Comment by Rajiv Doshi — January 21, 2008 @ 7:31 am
Slide is a great company. Max has a giant brain. They're playing in a much bigger sandbox than just facebook. This will turn out to be a great investment for all involved. The social web is the next evolution and slide is well-positioned to generate significant revenue. Congrats to max et all on continuing to execute!!!!

Comment by michael lazerow — January 21, 2008 @ 7:35 am
I have to admit, 2.0 valuation science is becoming eerily similar to that of late 90s tech stocks. The difference is that – so far – there is no attempt at "revisionist analysis" – that is, inventing new metrics simply to justify lofty price tags. Given the size of investments relative to AUM, it's clear that the VC/PE guys are taking a fairly conservative approach and not looking for a quick exit. They want to be there should things take off, but not be hammered should they go sour.Just a bit of perspective: DivX, a developer of media app-related products and services has a market cap of nearly $500 million, but earned $11 million on revenues of $77 million for the year ended 9/2007. Maybe not a fair comp, but is Slide even close?

Comment by David R. Strachan — January 21, 2008 @ 6:20 pm
I have to admit, 2.0 valuation science is becoming eerily similar to that of late 90s tech stocks. The difference is that – so far – there is no attempt at "revisionist analysis" – that is, inventing new metrics simply to justify lofty price tags. Given the size of investments relative to AUM, it's clear that the VC/PE guys are taking a fairly conservative approach and not looking for a quick exit. They want to be there should things take off, but not be hammered should they go sour.

Just a bit of perspective: DivX, a developer of media app-related products and services has a market cap of nearly $500 million, but earned $11 million on revenues of $77 million for the year ended 9/2007. Maybe not a fair comp, but is Slide even close?

Comment by David R. Strachan — January 21, 2008 @ 7:20 pm
That's definitely good news for the entire community

Comment by Jonathan Kleiman — January 21, 2008 @ 8:50 pm
That's definitely good news for the entire community

Comment by Jonathan Kleiman — January 21, 2008 @ 11:50 pm

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On paper Slide is actually valued at $500 million by it's investors. Slide is more than applications, they are a widget company. But they have distribution and eyeballs that can be monetized through advertising but they also need the user's attention and engagement which without more metrics is hard to guess. It will be interesting to watch their next steps now that they have the capital to invest in their next big growth areas.

Comment by Rajiv Doshi — January 21, 2008 @ 6:31 am

Slide is a great company. Max has a giant brain. They're playing in a much bigger sandbox than just facebook. This will turn out to be a great investment for all involved. The social web is the next evolution and slide is well-positioned to generate significant revenue. Congrats to max et all on continuing to execute!!!!

Comment by michael lazerow — January 21, 2008 @ 6:35 am

Comment by Rajiv Doshi — January 21, 2008 @ 7:31 am

Comment by michael lazerow — January 21, 2008 @ 7:35 am

I have to admit, 2.0 valuation science is becoming eerily similar to that of late 90s tech stocks. The difference is that – so far – there is no attempt at "revisionist analysis" – that is, inventing new metrics simply to justify lofty price tags. Given the size of investments relative to AUM, it's clear that the VC/PE guys are taking a fairly conservative approach and not looking for a quick exit. They want to be there should things take off, but not be hammered should they go sour.Just a bit of perspective: DivX, a developer of media app-related products and services has a market cap of nearly $500 million, but earned $11 million on revenues of $77 million for the year ended 9/2007. Maybe not a fair comp, but is Slide even close?

Comment by David R. Strachan — January 21, 2008 @ 6:20 pm

Just a bit of perspective: DivX, a developer of media app-related products and services has a market cap of nearly $500 million, but earned $11 million on revenues of $77 million for the year ended 9/2007. Maybe not a fair comp, but is Slide even close?

Comment by David R. Strachan — January 21, 2008 @ 7:20 pm

That's definitely good news for the entire community

Comment by Jonathan Kleiman — January 21, 2008 @ 8:50 pm

Comment by Jonathan Kleiman — January 21, 2008 @ 11:50 pm