According to Nicholas Carlson, Accel partners, one of the initial investors in Facebook, just close a $1 billion round, $480 million of which is going toward a new “Growth Fund”, for late-stage companies. While Facebook says that they have plenty of money in the bank, many have been speculating about the company’s cash position stating that the cost of growth has been extremely costly forcing them to raise another round.
Mike Arrington suggested that this was the reason behind a recent trip to Dubai by Gideo Yu of Facebook but Mark Zuckerberg later stated at Web 2.0 that the company was not in need of money. The company continues to have substantial growth and it could be putting a strain on the company if revenue doesn’t grow at the same rate.
Caroline McCarthy suggested that the rumors didn’t make a lot of sense considering Mark Zuckerberg’s focus on keeping the company running at around break-even most of the time. Nicholas Carlson paints a dire picture though in today’s article suggesting that “Facebook needs cash and soon as revenues continue to miss expectations.”
Facebook is still one of the hottest companies and no matter how Facebook intends to obtain a new round of funding, it will no doubt find it if necessary. It may not be at Microsoft’s $15 billion valuation though. With the down economy and a company looking for cash, Accel could be its savior, especially with Jim Breyer having a board position.
I’m not sure that the situation is so dire but hey, who couldn’t use an extra couple hundred million dollars, right?