Estimated at $32.5 million in Facebook stock at the $6.5 million valuation

Aug 14, 2009 10:28 GMT  ·  By
Benchmark Capital got an estimated $32.5 million in Facebook stock at the $6.5 million valuation
   Benchmark Capital got an estimated $32.5 million in Facebook stock at the $6.5 million valuation

Facebook acquired FriendFeed on Monday, causing quite a bit of stir in the media but also among FriendFeed users. While some numbers were speculated, the actual value of the transaction wasn't specified. The Wall Street Journal claimed the deal was worth $47.5 million, with $15 million in cash and the rest in Facebook stock. Now it has been confirmed that Benchmark Capital, FriendFeed's only venture capital firm backer, took almost exclusively stock as part of the deal according to the firm's lead partner on the deal, Peter Fenton.

This distribution was speculated at the moment but it's now clear that FriendFeed's cofounders Paul Buchheit and Sanjeev Singh took the cash along with the company's employees while Benchmark Capital indirectly got its hands on a small stake in Facebook at the $6.5 billion valuation the social network put itself at earlier this summer as part of a common stock deal with Russian investment company Digital Sky.

FriendFeed has been at the forefront of innovation in social media, having some of its features adopted by others, including Facebook, over time. Still, while it was loved by its users, the site failed to gain any significant following, having barely passed the 1 million monthly users mark recently. Facebook on the other hand is a social networking giant with more than 250 million users worldwide which got its hands on a very talented team of engineers, most of them ex-Googlers, with the acquisition, albeit at a somewhat steep price.

Fenton, who was the lead partner for Benchmark in the deal, has been on a roll lately, having closed another major deal on the same day, with the sale of the open-source software company SpringSource to VMWare for $420 million. He also holds a seat on Twitter's board of directors and in several other interesting Silicon Valley companies.