Women’s fashion network Glam raises $18.5 million at whopping valuation

December 14, 2006 | Matt Marshall | Comments | |

glamlogo.bmpGlam Media, a Brisbane company that claims its online fashion site network has seven million unique readers per month, has raised $18.5 million in a third round of funding.

It has now raised a staggering $30 million, a huge amount of cash for a relatively new media company. The company is valued at $150 million after the round, according to various media reports, a level that nears absurdity. VentureBeat has not confirmed that value, but if true, it will be very difficult to turn a media company into something worth that much in the real marketplace.

Difficult, but possible, in this climate. It has a strategy. It plans to make a number of acquisitions, buying up Web 2.0 and other media properties. It has also struck a syndication deal with Hearst Magazines, whereby it is allowed to run that company’s content. Investors are clearly betting on the value of eye-balls, and in this sense, we’re back to 1999.

Its name, Glam, is sexy enough to help it grow. Glam cites ComsScore to say it is a top-10 women’s Web network (which include its own sites, but also Dwell, Nylon and 200 other sites and blogs). It runs news on fashion and celebrities, and then runs ads for folks like Guerlain, Victoria’s Secret, DKNY, Max Factor, Estee Lauder, L’Oreal, Neiman Marcus and Target. It pledges 10 million unique readers by the end of the year — representing very robust growth. It says it will be profitable soon.

DAG Ventures led the round, with participation from existing investors including Draper Fisher Jurvetson, Accel Partners, WaldenVC and Information Capital.

Co-founder Samir Arora previously worked at NetObjects (acquired by IBM) and Tickle.

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Matt Marshall is editor and CEO of VentureBeat. Follow him on Twitter at @mmarshall, and follow VentureBeat on Twitter at @venturebeat.

  • Media networks are some of the easiest web-based companies to start because they generate revenues immediately. Great writers publishing great content attracts lots of readers, which generate traffic and instant advertising revenue.

    I think a media company that raises $30 million shows that there is something fundamentally wrong with what they are doing, since their popularity is not showing a rapid organic growth in revenues without the huge influx of VC cash.

    They're not building factories, they're not fabricating microchips, they're not producing plastic widgets or dealing with overseas suppliers, they're just writing content and writers don't cost $30 million last time I checked.
  • $30 million funding, $150 mil valuation for a media company? BIGGG BUBBLE?
  • I was under the impression that Glam was positioning itself not as a media property, but as an e-commerce property... the media component is just to get more people to buy. Not that the valuation doesn't seem extremely high, but it might be that those involved view it in a different way than a media play.
  • Mike, I agree. Something is a little weird here. Perhaps they plan on doing an iVillage-esk ad campaign, which would certainly cost a ton of money without the NBC tie-in.
  • Groundhog
    If it's an e-commerce site, that implies valuations in the range of 1.5-2x trailing revs. You'd have to assume some significant advertising component to come close to that valution (unles we really think they are doing $75 MM in e-commerce revs).
  • Innotate– I agree completely! We women ARE being under marketed to- but I am a corprate slave but admit to having guilty pleasures (chocolotae, the dish you know) so did not care about the lowbrow remark.

    BTW Glam feels like they are doing it right to me. Why? Take a look at all the print magazines we all read- InStyle, Vogue, Marie Claire, Domino. Their websites are LAME. Yet they have so many advertisers- last September Vogue was thicker than the BIBLE!!! So if the geeks that watch YouTube all day or digg or whatever feel j$1.6B buyout by Google for a site that does not even make their own content and has zero revenue is justified and iVillage sold to NBC for $700 million, then I think Glam will certainly do better than them.

    Why?

    When I was at AOL Steve Case said- it's the subscription Stupid- in this case It's the CPM's stupid. Do the math- as a media buyer in an agency- at $20-$200 (clickz says) eCPM's, Glam sounds like a $100's million company. I wonder why did the did such a big raise then, may be they see something like YouTube or Google did early on- but it does sound odd. e-commerce, a big deal like Google-AOL, buying Digg?
  • Leon
    Glam may be a top 10 women's site as sited by the article, but its Alexa ranking is barely top 10,000. About 100 reach per million users.

    The $150M valuation gives them $1.5M valuation for 1 out of 1 million Internet users. In another word, each US woman (or man) daily visitor to the site is valued at about $10,000 (at least a few thousand dollars).

    An unusually high growth rate must have been assumed to make the numbers right. (I am not predicting whether Glam can achieve that kind of growth rate or not.)

    The site is glamorously designed. But its content, at least at the first look, is also highly and obviously commercialized.
  • I'll be talking with them more in January. Mike, yes, the trojan horse shopping angle might cleverer than I realized.
  • Good for Glam...I love the website