General Atlantic, a $17 billion investment firm, will soon become the latest investor in Facebook, buying one tenth of one percent (yes, only 0.1 percent!) of the company in a deal that values the social networking giant at $65 billion.
While the deal between General Atlantic and selling shareholders has been agreed to, it’ll require the approval of Facebook and so has not yet been closed.
Less than two months ago, Facebook Inc. announced that it had raised $1.5 billion at a valuation of approximately $50 billion, but that it had no immediate plans for the funds and would simply continue to build and expand its operations.
The transaction consisted of two parts: in January 2011, Goldman Sachs completed an oversubscribed offering to its non-US clients in a fund that invested $1 billion in Facebook Class A common stock.
And in December 2010, Digital Sky Technologies, The Goldman Sachs Group, and funds managed by Goldman Sachs, invested $500 million in Facebook Class A common stock at the same valuation.
The latest investment in Facebook, which values the company at $65 billion, means that the social networking site’s value has grown by another 30 per cent in less than two months.
The General Atlantic investment involves the purchase of a block of roughly 2.5 million shares of stock from former Facebook employees, a report said.
General Atlantic, which typically makes investments of between $50 million and $500 million in both private and public growth companies, has invested in other net darlings such as Gilt Groupe and Ali Baba.
The focus of investors on Facebook has been intense; and for those who want to find stock to buy, the process is equally ferocious, requiring calls to numerous ex-employees and large holders of the stock from its early days.
A General Atlantic spokesperson did not respond to calls or emails. Facebook declined to comment.
Founded in 1980, the firm has $17 billion in capital under management. Companies in the firm’s investment portfolio include luxury goods seller Gilt Groupe and software company Kaspersky Lab. [via CNBC]