Catching up on history: Twitter [June 25, 2008]
[http://www.innoeco.com/labels/Obvious.html]
Will Twitter Be Spark Capital's First Home Run?
You can't have a conversation with a techie without Twitter entering into it somehow. Either:
1. They've just begun Twittering
2. They're skeptical Twitter will ever make money
3. They're complaining about Twitter's frequent outages
4. They believe Twitter is the future of communications
Yesterday [6/24/08], Spark Capital of Boston announced that it was one of two investors in Twitter's new $15 million funding round. (Twitter's parent, Obvious Corp., is based in San Francisco.) The other investor is a dude called Jeff Bezos. PaidContent says the new round values the start-up at a shade under $100 million. TechCrunch had it last month at closer to $80 million. Clearly, they'll use some of the fresh cash to make Twitter more reliable.
Spark partner Bijan Sabet, who'll join Twitter's board, talks about the investment here. Twitter co-founder Biz Stone tells the story from his perspective on the Twitter blog.
I spoke with Sabet this afternoon, and suggested that his avid use of Twitter might've helped him get in on the deal (several other Boston VC firms were angling to invest). Sabet said it'd be self-serving to explain why he thought Obvious chose Spark to invest in this latest round, but he did mention that three other partners at Spark use Twitter; I'm not aware of any other Boston VCs who do. It's hard to imagine a Boston VC lobbying to get into this kind of deal without having some first-hand experience with the product. Sabet says that for Spark, using Twitter "made us feel comfortable that we knew what was going on, beyond just reading the business plan." When I asked again if he thought his status as a Twitter user contributed to the company choosing Spark to be part of this round, Sabet dodged the question...
Of course, the Boston VCs who lost out here will say they didn't like the valuation, or they weren't comfortable putting money into a pre-revenue company... which is their prerogative. But it's worth reading this post from Jason Calacanis about Twitter's potential to be a billion-dollar business.
Getting into this round is a big deal for Spark... an investment that could put the firm on the map. I'll be shocked if Twitter isn't acquired before 2009 is out. |
