The new focus of Silicon Valley: Square

Just as Silicon Valley has been annoyed by the loss of Facebook's IPO, the Square as an up-and-comer has quickly attracted a lot of attention and has become a new focus in Silicon Valley, according to foreign media reports.

Full of chill

The forward-looking payment company plans to launch a new round of financing at a 4 billion dollar valuation, just a year ago, with a valuation of just 1 billion dollars. This rate of increment is comparable to the pre-IPO Facebook.

But as Facebook's valuations have shrunk by 26 billion dollars over two weeks ago, industry insiders worry that the boom in social media and other Internet companies that started last year has peaked. "The whole market is full of chill," said a venture capitalist who focuses on late-stage investments. " ”

A handful of popular internet startups, such as Square, ethically fabulous, and Ideeli, have raised money with ultra-high valuations, and now they will be the litmus test of whether the latest boom in technology will change as a result of Facebook's IPO.

In a key indicator, the Faceobok IPO has been a huge success-helping the company's early investors raise as much money from the open market as possible. Late-stage investors and investors who hit new shares have suffered heavy losses. The unit hit a minimum of 26.83 dollars in Thursday.

Focus on Square

A number of high-profile start-ups have been fortunate enough to complete their fundraising before Facebook's IPO. The social questions and answers website Quora recently financed $50 million in a 400 million dollar valuation, even though the company has yet to earn any revenue. The picture social networking site, Pinterest, financed $100 million in a 1.5 billion dollar valuation.

But companies that have not been able to finance Facebook before the IPO may face embarrassment. People familiar with the matter said the work collaboration network Asana has been negotiating a new round of financing with venture capitalists on a scale of about 20 million to 3 million dollars, with a corresponding valuation of $250 million. Other people close to the situation said that online retailers Justfabulous and Ideeli also started financing talks ahead of Facebook's listing to finance 30 million to 50 million dollars in valuations of 300 million to 500 million dollars.

But one of the most interesting is square, founded by Dorsey, the Twitter co-founder, Jack Dorsey. The company has reshaped its pay function with mobile devices, sophisticated software and identity technology.

Square last October announced a 1 billion-dollar valuation financing of $100 million, by Kleiner. Other supporters of the company include Sequoia Capital, Tiger Global management and visa. Venture capitalists say the company plans to launch its next round of funding with a 4 billion dollar valuation, but a square spokeswoman declined to comment.

Typically, a venture capitalist decides to invest in a company by 3 to 5 times times the value of its IPO or acquisition. That means shoring up 4 billion of billions of dollars in valuations, which are worth at least $12 billion trillion in a few years-a demanding one, after all, where the industry is low-margin and awash with cash-strapped old businesses and even fraud.

Square fans argue that the company is growing fast and that it can rely on social media platforms for unique opportunities, while veteran companies are weak in innovation.

Other Enterprises

Asana may be the most telling story. The company, which is run by Facebook co-founder Dustin Moscow (Dustin Moskovitz), earns steady revenue from premium customers every month, so it has not only growth potential but also robust business. However, the industry believes that social networking was originally a asana advantage, but now seems more like a burden.

Asana spokesman declined to comment on the financing issue.

Some venture capitalists believe that the days of justfabulous and Ideeli may be even sadder. Adam Goldenberg, Justfabulous's co-CEO, said the company would not comment on the financing issue Adam Goldenberg. Ideeli spokesmen also declined to respond.

Most E-commerce companies will eventually be bought at a rate of 1 to 1.5 times times the market, which can reach 5 to 10 times times the rate of early-stage financing, venture capitalists say. For VCs, it is necessary to boost the company's revenue by 15 times times to achieve a 3 times-fold return on investment.

High valuations also reduce the number of potential acquirers. Apple, Facebook, Google or Microsoft are almost the only potential acquirers, based on a 10-digit estimate. More importantly, the entire IPO market will also enter a period of dormant period.

Asana's last financing was in 2009, when the Anderson Hollowitz Fund (Andreesseen Horowitz) and benchmark Capital pledged to invest 10 million of dollars. Justfabulous financed $33 million last year, Ideeli a total of $70 million trillion, including $41 million trillion in financing last year.

Disagree

"I think the value of the private market is too high. "Former star Internet analyst, now Kleiner partner Mary Mik (Mary Meeker) said. "We run a 1 billion-dollar digital growth fund in Kleiner, but not a penny in the March quarter," she said at the D10 conference this week. We consider the valuation unreasonable. ”

Internet conferencing Le Web CEO Loic Le Meille (Loic Le Meur) also said the valuations in recent months were "crazy". He added: "I don't think it's a bad thing if valuations fall a bit." ”

But not all Silicon Valley people think that private companies ' valuations will fall sharply. "After a year or two, I'm not sure if you still think that high quality business prices should fall," said Seguiro Mans Sergio Monsalve, Norwest Bank investor. ”

for VCs, "growth is crucial," said Gleen Solomon, GGV Capital partner at venture capitalists, "and there is still a lot of growth." (PEI)