Glam 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.
9 Comments
-
Mike Rundle said:
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.
-
Startups.in/India said:
$30 million funding, $150 mil valuation for a media company? BIGGG BUBBLE?
-
Mike Masnick said:
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.
-
Nate said:
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 said:
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).
-
Ashley said:
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 said:
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.
-
Matt Marshall said:
I’ll be talking with them more in January. Mike, yes, the trojan horse shopping angle might cleverer than I realized.
-
Erica said:
Good for Glam…I love the website
7 Trackbacks
8:20 am
VentureBeat Wire » Women’s fashion network Glam raises $18.5 million at whopping valuation said:
[...] See our story here. VentureBeat Community [...]
2:06 pm
innonate » More about Women and the Net said:
[...] More evidence of people “getting” this came today, as VentureBeat reported that fashion network Glam Media raised another $18.5 million at a valuation of a staggering $150 million. What made this interesting to me was that the CNET author and I agreed that women were being under-marketed to in the online space, but not in lowbrow areas such as fashion and gossip. With sites like Glam, PopSugar, and a whole host of other women-oriented site, she and I agreed that where women are really being under-served is in the web app space, and specifically in the practical and useful web app space. [...]
1:55 am
Traffic is Magical » Wisdump said:
[...] For more information on the Glam investment checkout Venture Beat which reports that in total they have received over $30 million in investments. Stunning. [...]
7:14 am
VentureBeat Wire » Women’s fashion network Glam raises $18.5 million at whopping valuation said:
[...] See our story here. VentureBeat Community [...]
2:47 am
Le donne e il web (2.0 o 1.0 che sia) said:
[...] Glam Media, sito web a target prettamente femminile che vanta 7 milioni di accessi unici al mese ha raccolto 18.5 milioni di dollari da venture capitalist ultimamente, portando il suo “budget” a 30 milioni di dollari, cifra davvero notevole per una società relativamente giovane… [...]
7:03 pm
Glam: #1 network for women said:
[...] Accel Partners, Draper Fisher Jurvetson, WaldenVC, and Information Capital, the company had a valuation of $150 million after the last $18.5 million Series C round in December [...]
10:15 pm
VentureBeat » Glam still raising up to $200 in cash and debt, announcement coming soon said:
[...] million, not more. Even that is high, considering Glam is mere four years old and was valued at $150 million a year ago. (Though IGN, a men’s/gaming site comparable to Glam in size, was purchased by Fox for $650 [...]