Here’s the top of my BusinessWeek story about Facebook’s big new financing round based on brief yet exclusive interviews with Facebook CEO Mark Zuckerberg and investor-of-the-moment, Russia’s Yuri Milner.
From Russia With Love: Facebook Lands $200 Million
The social networking site will tap Digital Sky Technologies for expansion funds in a deal valuing Facebook at $10 billion. Still no public issue
Ending months of fevered speculation over whether it would raise more money, social network Facebook said on May 26 that it will take a $200 million investment from Russia’s Digital Sky Technologies.
In return, DST is getting preferred stock worth 1.96% of Facebook, valuing the social network at $10 billion. This is the first time Facebook has raised major equity funding since late 2007, when Microsoft (MSFT) invested $240 million in exchange for a 1.6% stake that valued the site at $15 billion.
In a move that will help Facebook employees unlock some of the value of their shares before the company goes public or is sold, DST will purchase at least $100 million of Facebook common stock from current or former Facebook employees. DST co-founder Yuri Milner tells BusinessWeek that the agreement to buy common stock was not a precondition of the equity investment. “These are two separate transactions,” Milner says in an interview. DST and Facebook say they will release details of the plan this summer.