Cable giant Comcast has purchased the female-oriented email newsletter DailyCandy for $125 million, Silicon Alley Insider reported earlier today. What isn’t being reported though is that the sale price is actually less than the valuation DailyCandy received following its last round of funding, a source close to the sale tells us.
Following an investment two years ago (after a failed attempt to sell), DailyCandy was valued at $130 million, The Wall Street Journal reported at the time. Our source says it may have actually been as much as $140 million.
So while Bob Pittman’s Pilot Group, which bought DailyCandy for around $3 million back in 2003, may be making a killing on the deal, anyone who was involved in the last round and any employees who have come on since then are actually getting the short end of the stick.
So why sell below the most recent valuation? Well, because Pilot has been trying to sell DailyCandy for years — ever since iVillage sold to NBC for $600 million back in 2006. It apparently found no acceptable offers as many were worried about the service’s growth potential. When it couldn’t find someone to buy the site, Pilot decided it was time for another round of funding instead — the round that valued it at up to $140 million.
So while $125 million is a significant improvement over the rumored $75 million price DailyCandy almost went for last month, it’s not a huge boon to all its investors.