Facebook confirms $1.5B funding, leaves $500M on the table

Facebook announced today that its widely-reported deal with Goldman Sachs, which values the company at $50 billion, has closed. The funding included $500 million raised from Goldman and previous investor Digital Sky Technologies in December, as well as another $1 billion raised from Goldman clients outside the United States.

For the most part, this just marks the official acknowledgment of what has been reported already. The company described the deal as “an attractive opportunity to bolster its cash reserves and increase its financial flexibility with limited dilution to existing shareholders.”

Facebook’s press release does include two interesting details — that Facebook had the option to accept $1.5 billion from Goldman’s clients, but decided not to accept the last $500 million, and that Facebook plans to start publicly disclosing its financial numbers by April 2012.

Why did Facebook leave money on the table? Fortune had earlier reported that Facebook was using the money, in part, to buy back shares from its employees, and that the amount it accepted from Goldman would be determined by employee interest in the buyback. Today, Facebook only said:

Facebook made a business decision to limit the offering to $1 billion … There are no immediate plans for these funds. Facebook will continue investing to build and expand its operations.

Another possibility is that Facebook was unhappy with how Goldman handled the deal, specifically the fact that Goldman cut out US investors at the last minute. The supposed reason was that the funding was getting so much publicity that it risked looking like a public offering to regulators. So if Facebook didn’t really need the money, this could have been a way to slap Goldman on the wrist.

As for the public disclosure in 2012, this confirms earlier reports that Facebook planned to cross the Securities and Exchange Commission’s 500-shareholder threshold soon, which would require it to disclose more financial details publicly. Is that a sign that an initial public offering is coming in 2012? That looks like a real possibility, but as noted earlier, it’s not guaranteed — other private companies have started disclosing their numbers publicly without having an IPO right away.


Mobile developer or publisher? VentureBeat is studying mobile app analytics. Fill out our 5-minute survey, and we'll share the data with you.

Trackbacks

  1. [...] Investment titan Goldman Sachs, which has been working with Facebook since January, seeks to manage the offering. In January, Goldman valued Facebook at $50 billion. [...]

  2. [...] Investment titan Goldman Sachs, which has been working with Facebook since January, is seeking to manage the offering. In January, Goldman valued Facebook at $50 billion. [...]

  3. [...] ahead of what could be some of the most high-profile tech IPOs to date. Facebook, for example, was valued at $50 billion after its most recent round of funding, although it is trading at a higher price than that on secondary [...]

  4. [...] ahead of what could be some of the most high-profile tech IPOs to date. Facebook, for example, was valued at $50 billion after its most recent round of funding, although it is trading at a higher price than that on secondary [...]

  5. [...] aiming for an IPO in early 2012 and could be worth up to a $100 billion valuation. In January, Goldman Sachs valued Facebook at $50 billion. With all those types of numbers circulating, the Winklevoss twins had good reason to seek more [...]

  6. [...] aiming for an IPO in early 2012 and could be worth up to a $100 billion valuation. In January, Goldman Sachs valued Facebook at $50 billion. With all those types of numbers circulating, the Winklevoss twins had good reason to seek more [...]

  7. [...] The dispute by the Winklevoss brothers claims the 2008 settlement was based on an incorrect valuation of Facebook and therefore not accurate. Facebook is reportedly aiming for an IPO in early 2012 and could be worth up to a $100 billion valuation. In January, Goldman Sachs valued Facebook at $50 billion. [...]

  8. [...] The dispute by the Winklevoss brothers claims the 2008 settlement was based on an incorrect valuation of Facebook and therefore not accurate. Facebook is reportedly aiming for an IPO in early 2012 and could be worth up to a 0 billion valuation. In January, Goldman Sachs valued Facebook at billion. [...]

  9. [...] 2012 &#1072nd &#1089&#959&#965ld b&#1077 value adult t&#959 a $100 billion valuation. In January, Goldman Sachs valued Facebook &#1072t $50 billion. W&#1110th &#1072ll those forms &#959f contribution circulating, th&#1077 Winklevoss twins h&#1072d [...]

  10. [...] planning an IPO for the first quarter of 2012, with a potential $100 billion valuation. In January, Goldman Sachs valued Facebook at $50 billion. The investment firm is seeking to manage Facebook’s [...]

  11. [...] planning an IPO for the first quarter of 2012, with a potential $100 billion valuation. In January, Goldman Sachs valued Facebook at $50 billion. The investment firm is seeking to manage Facebook’s IPO. Filed under: Business and [...]

  12. [...] It’s also surprising that Zynga, one of the largest Web 2.0 companies, has not needed to raise more money than it has. Group-buying site Groupon raised more than Zynga’s total amount of funding in a single round that it completed in January. Facebook has also raised an enormous amount of funding and recently raised $1.5 billion in January. [...]

  13. [...] is the world’s largest social networking site and has 750 million monthly users. It recently finished a fundraising round worth $1.5 billion that valued the company at $50 billion. GSV Capital also recently invested in the company at a [...]

  14. [...] Sachs has a long history, dating back to when Byrne decided not to go the corrupt IPO route, so lucrative for the big banks. Instead, he chose to pioneer the Dutch [...]

  15. [...] one it is said to be planning is practically a given for a company that’s raised more than $2.3 billion from investors. Its price is just too high for the majority of potential acquirers out there. Now, [...]

  16. [...] one it is said to be planning is practically a given for a company that’s raised more than $2.3 billion from investors. Its price is just too high for the majority of potential acquirers out there. Now, [...]

  17. [...] the one it is said to be planning is practically a given for a company that’s raised more than $2.3 billion from investors. Its price is just too high for the majority of potential acquirers out there. Now, [...]

  18. [...] the one it is said to be planning is practically a given for a company that’s raised more than $2.3 billion from investors. Its price is just too high for the majority of potential acquirers out there. Now, [...]

  19. [...] the one it is said to be planning is practically a given for a company that’s raised more than $2.3 billion from investors. Its price is just too high for the majority of potential acquirers out there. Now, [...]

  20. [...] one it is said to be planning is practically a given for a company that’s raised more than $2.3 billion from investors. Its price is just too high for the majority of potential acquirers out there. Now, [...]

  21. [...] the same bank that put together a private offering of Facebook shares to help the social network raise $1.5 billion in funding last January, is said to have lost some [...]

  22. [...] the same bank that put together a private offering of Facebook shares to help the social network raise $ 1.5 billion in funding last January, is said to have lost some [...]

  23. [...] the same bank that put together a private offering of Facebook shares to help the social network raise $1.5 billion in funding last January, is said to have lost some [...]

  24. [...] the same bank that put together a private offering of Facebook shares to help the social network raise $1.5 billion in funding last January, is said to have lost some [...]