Funding Facebook: What Is The Correlation Between Funding & Growth?

FUNDING FACEBOOK What Is The Correlation Between Funding & Growth? Within the first few years of starting a business, most owners consider funding a cash injection to help to enable the business to grow at an accelerated rate. However, funding is often highly risky for both owners and investors alike. In this infographic we look at the impact funding had on the revenues and user base of Facebook, a startup that has turned into the biggest social network to ever exist. FUNDING $ Jan 2011 $1.5bn Digital Sky Technologies $2bn Goldman Sachs Oct 2007 $240m May 2008 $100m $1.5bn Microsoft TriplePoint Capital $ibn Nov 2007 $60m Mar 2008 $60m May 2009 $200m June 2010 Horizons Ventures Horizons Ventures $210m Li Ka-shing Li Ka-shing Digital Sky Technologies Elevation Partners $500m Jan 2008 $15m European Founders Fund $150m April 2006 $27.5m SV Angel May 2005 $12.7m Founders Fund $100m Reid Hoffman Meritech Capital Partners Mark Pincus Greylock Partners Accel Partners $50m Sept 2004 $50ok $1m Reid Hoffman Peter Thiel $500k 2004 2005 2006 2007 2008 2009 2010 2011 By 2007, Facebook had really started to take off on University campuses. With many members of the social network being students, Investors like Microsoft saw the user base start to widen as Facebook grew in popularity with other demographics. Since 2008, Facebook did not receive an investment under $200 million. Altogether it raised $2.4 billion from 11 funding rounds. In May 2012 (not shown on the graph), the company raised a whopping $16 billion when they went public. As of September 2014, shares are approaching a record high of almost $80. USERS 1.23bn 1.3bn 1.2bn 1bn 1.1bn 1bn 800m 90om 800m 70om 500m 60om 500m 300m 400m 300m 100m 200m 100m 2008 2009 2010 2011 2012 2013 As the amount of funding received by Facebook grew significantly between 2007 and 2008, user numbers tripled between 2008 and 2009. Although users aged 18-24 make up the largest proportion of users, many new users aged 25-34 and 35-54 started to join Facebook, particularly between 2009 and 2010. Somewhat unsurprisingly, growth in 2013 was lowest for those aged under 24 (with many turning their attention to other social platforms) and highest for those aged 55* (with many joining as an easy way to keep in touch with family and friends). As of early 2014, Facebook is estimated to have 1.25 billion users, that's about 17.5% of the world's population! REVENUE $7.9bn $10bn $5bn $3.7bn $5bn $2bn $775m $ibn $500m $280m $150m $250m $100m $52m $50m 2006 2007 2008 2009 2010 2011 2012 2013 Facebook has an interesting business model, somewhat similar to that of Google, which a number of other tech companies, including app developers and owners of other social media platforms, have started to emulate. The model involves building a huge user base of free users. All revenues are generated from advertisements placed in the sidebar, on the homepage, and now in the main News feed. With the exception of Google, no other company has managed to achieve this on the same scale as Facebook. A number of early investors had to wait a few years before they saw their return; but with revenues of almost $8 billion last year, many of Facebook's investors have made a tremendous return on their initial investments. SOURCES: COUNTY FINANCE GROUP http://en.wikipedia.org/wiki/Facebook http://www.crunchbase.com/organization/facebook LIMITED