Yesterday we reported on Path’s new $8.5 million venture round, led by Kleiner Perkins and Index Ventures. I was curious about the valuation and pulled on a couple of threads. What unraveled was a stunning story about a startup that almost ran out of cash, a rebuffed $100+ million buyout offer from Google, and, finally, a new round of financing.
Path is still very small, with just “hundreds of thousands” of users, said the company yesterday. It’s a private mobile network limited to just 50 friends, which makes viral spreading difficult. But we’re also hearing that 20% of active users are using it daily – a Zynga-like engagement rate that is a sign that at least some people really connect with Path.
In early December Path had a signed term sheet with Kleiner Perkins and Index. At that point Google made a move, eventually offering $100 million for the company plus an earnout of $25 million to be paid over four years. Taking that Google offer would seem to most people like a no brainer. And for founders like Dustin Mierau, who haven’t had liquidity events, a life changing experience.
Read more: Techcrunch