Cuil's Too-Cool Valuation: $200 Million
This story was written by Joseph Weisenthal.
At least it has a valuation worthy of the hype Cuil, the recently launched search startup, mainly known for the yawning gap between the quality of the site and the amount of press it got, is valued at $200 million by its investors. The number was determined by PE Data Center (via VentureBeat), using public records, going back to its incorporation in late 2006. Besides the eye-popping headline price, the analysis provides a good glimpse into the mechanism for achieving this valuation, which jumped rapidly from $32 million in early 2007, to the latest price, set later that year, when it raised $25 million, for a total raise of about $33 million. The amount raised had been publicly known, so the story isn't just that they raised a lot (which they did), but that the founders (with Googly resumes), could get such favorable terms. Meanwhile the chief investor, Madrone Capital, which manages the money of the Wal-Mart (NYSE: WMT) heirs, did a rather un-Wal-Mart job of getting a bargain.
Some perspective from VentureBeat: "Typically investors put in much less money and claim a far greater percentage ownership. In another case recently, Silicon Valley semantic search engine Powerset commanded a valuation of $40.5 million in its first round, which was considered very high at the time. It failed to meet investor expectations, and sold for $100 million to Microsoft (NSDQ: MSFT), giving investors somewhat more than a two-fold return."
By Joseph Weisenthal