Trinity Ventures stands to win big with the sale of photo sharing Web site
Photobucket Inc.
News Corp., the parent of MySpace, announced a deal to scoop up
Photobucket
for a figure reportedly between $250 million and $300 million. Palo Alto,
Calif.-based Photobucket provides photo and video storage for millions of
users of social-networking sites like MySpace, Bebo and Facebook.
In making Photobucket into the largest of the Web 2.0 photo-sharing sites, the
company's founders and
Trinity
Ventures will exit as winners in what is likely an
overfunded
industry. In just the first half of 2006, venture firms funded at least 10
such companies, with startups such as FilmLoop Inc., One True Media Inc., Riya
Inc., Cleversafe LLC, Simple Star Inc., iBloks Inc., Blurb Inc. and Presto
Services Inc. receiving financing to further develop technology for hosting
and creating digital images.
Menlo Park, Calif.-based Trinity led Photobucket's $10 million Series B round
in May 2006.
The venture firm also hit a home run with the initial public offering of
wireless local-area network technology developer Aruba Networks Inc. in March.
At the $11per share offering price, Trinity's 13.6% stake was worth $122.7
million. The stock was trading at a new high of over $18 Wednesday. Trinity
also hit it big with the
IPO
of LoopNet Inc. in June 2006, when shares of the San Francisco-based
online marketplace for commercial real estate closed up 25% in their first day
of trading.
On the M&A front, Trinity cashed out of Internet polling startup Bix.com
and Jamba Juice Co., a chain of juice bars serving fresh-fruit drinks and
smoothies in 2006. San Francisco-based Jamba Juice was sold to Fort
Lauderdale, Fla.-based Services Acquisition Corp. International for
$265
million in March; while Yahoo! Inc. bought portfolio company Bix.com
in November 2006 for an undisclosed amount just months after Trinity and
Sutter Hill Ventures invested $6.77 million in a Series A round.
The IPO exits were likely to have significantly moved the IRR needle on the
vehicle Trinity raised in 2000, a generation of funds where positive returns
have not been the norm, while the Photobucket buyout starts the firm's
recently closed ninth venture fund off on the right foot. —George White
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