Recently I sat down with a well-connected Silicon Valley CEO who just raised a ton of money, and who knew of other startups raising even more. There is a new startup club of younger companies raising money right now at $1 billion valuations. I already knew a couple of them, but I started asking a few venture capitalists and now I have a pretty good list of who is in that club and who is trying to get in (see below).
As we all watch the established Web companies go public [LinkedIn (NYSE:LNKD), Pandora (NYSE:P)] or prepare for an IPO [Groupon (NASDAQ:GRPN), Zynga, Facebook], there is this new class of younger, but fast-growing, startups rising up right behind them. A lot of them are out raising money right now at $1 billion valuations. These are $50 to $100 million rounds, and they are generally going to companies showing incredible growth rates in both users and revenue, at least according to investors who have looked at these deals.
So who is in the new billion dollar valuation club?
Airbnb is definitely in the club. The crowdsourced marketplace for turning your apartment into a hotel for a night grew 800 percent last year in nights booked to 800,000. There are currently 60,000 listings, and bookings keep growing by 40 to 50 percent a month. Sublets are next. This is going to be one of the biggest companies to come out of Y Combinator.
Square is also in the club. It is raising at least $50 million. Square passed 500,000 card readers and 1 million transactions in May, and is processing more than $3 million a day in mobile payments. COO Keith Rabois told us at Disrupt NYC that Square will do $1 billion in transactions this year, and he thinks it could ultimately do better financially than Paypal (where he was an early executive). Vinod Khosla recently joined the board.
Spotify is finally closing its $1 billion round that’s been in the works since at least February, with DST, Kleiner, and Accel participating. The $100 million or so it is expected to raise will help the music streaming service enter the U.S. market. Finally. Maybe. We’ve been waiting for you.
Dropbox, the Y Combinator file-sharing startup that only ever raised $7.2 million might end up with the largest valuation in the club, perhaps as high as $1.5 billion or $2 billion. It’s just growing like crazy, with 25 million users saving 200 million files daily. That’s up from 4 million users 18 months ago. But this deal is the one that keeps getting pushed out (it is growing so fast that the longer it waits to take money, the higher the valuation).
Gilt Groupe is already in the club. It closed a $138 million round at about a $1 billion valuation last May. One of the first companies to introduce online flash sales in the U.S., Gilt is on track to do $500 million in revenues this year and has expanded from fashion to food, travel, local deals, and more.
FourSquare is also rumored to be out raising another round, but it might not quite make it into the $1 billion club because its revenue doesn’t justify that kind of valuation. Unless, that is, it pulls a Twitter.
Just above this group, is Pandora (which just went public with a $2 billion market cap), LivingSocial (with a $3 billion valuation), LinkedIn (already public, with a $6.3 billion market cap), Twitter (which is worth anywhere from $3.7 billion to $10 billion), Zynga (which will be worth north of $10 billion when it goes public), Groupon (which could be worth more than $25 billion) and Facebook (which is already worth $50 billion and could go as high as $100 billion by the time it IPOs).