Balderton makes 9x on Bebo

The third largest site of its kind behind Facebook and MySpace, Bebo has over 40 million members, and is the number one social networking destination in Ireland and New Zealand. Its users view an average of 78 pages per day, with approximately 100 employees operating in offices in the UK, San Francisco, and Austin, Texas.

Randy Falco, Chairman and CEO of AOL said: “Bebo is the perfect complement to AOL’s personal communications network and puts us in a leading position in social media. What drew us to Bebo was its substantial and fast-growing worldwide user-base, its vision of a truly social web, and the monetization opportunities that leverage Platform-A [AOL’s advertising division] across our combined global audience. This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers.”

For Balderton, the sale of Bebo represents the end of a 22-month investment. The firm, then known as Benchmark Capital Europe, invested US$15m in the company’s one and only funding round in May 2006. Balderton is the only institutional investor in Bebo.

Barry Maloney, a GP at the firm and of Bebo since the original investment, said: “We got involved in an exciting and competitive investment in Bebo because we believed in the social networking space and the fact that Bebo was positioned for exponential growth. Our expectations for Bebo have been exceeded in a relatively short period of time, and today’s transaction with AOL has delivered an exceptional return on our original investment in 2006.”

This sale marks the second major exit for European venture capital this year, and both have come from the portfolios of Balderton. In January, MySQL, the second largest independent open source software company in the world, was for US$1bn by US software giant Sun Microsystems, representing an successful exit for a number of VCs including, aside from Balderton, Index Ventures and Intel Capital.