The figure may sound high, but it’s only a 11x raw multiple on the $115 million invested into the company over 4.5 rounds (there was an extended Series D round with an additional $20m), but in effect a much lower multiple for investors. Investors in Glam include Hubert Burda Media, GLG Partners, Hercules Technology Growth Capital, Accel Partners, Draper Fisher Jurvetson, WaldenVC, Information Capital LLC and DAG Ventures.
The company has been prone to exaggeration in the past, particularly when it comes to traffic figures, with Glam regularly claiming figures such as 53 million across its “network” when most of that traffic isn’t there’s. Glam operates as a hybrid blog network and advertising company, but most of the value comes from the advertising arm, a business that is always risky when your inventory can easily decrease overnight.
On the positive side though every person and company I’ve spoken to who has been using Glam Media for advertising sales over the last few years has been extremely happy with the high yield results. Glam has come to own the female advertising vertical and it’s a space that pays surprisingly very, very well. However TechCrunch did report in March that Glam was slashing advertising rates.
The remaining question though: was turning down $1.3 billion the right decision, particularly at a time where the US economy is under severe pressure that could result in a curtailing of ad spending? Time will tell, but we do know for sure that the peak of the boom can’t last forever.