German media giant Burda has used its digital arm to purchase a 25.1% share in XING, the business social network that is biggest in Germany and competes with LinkedIn. The 1,323,041 shares were sold to Burda by Cinco Capital, the investment vehicle owned by the former XING co-founder Lars Hinrichs. Priced at €36.50 per share, the deal is therefore worth €48.3 million. This makes Burda Digital the largest shareholder in XING. Burda already has positions in Glam Media, the GameDuell startup and Zooplus.
Hamburg based business social network XING continued to grow revenue and EBIDTA in the first nine months of 2009 while profits were smaller than last year. Total revenues from January to September amounted to €33.2 million – or $49 million – up 32 percent from the same period last year (€25.1 million).
XING is floated on the German stock exchange and this new investment by Burda simply re-inforces XING’s profile as a German company. It’s tried to expand internationally, mainly in Asia, but it looks locked into its roots.
The question is, can it maintain its position in Germany forever? Asked recently if LinkedIn would buy XING to further it’s expansion in Europe co-founder Konstantin Guericke said “It’s just not necessary. LinkedIn grows “by the size of one XING every three months”.
Sounds like a good deal.
Closing price was EUR 33.01. (10.6% markup)
But then again the highest price over the last 52 weeks is EUR 39.8 (8.3% from peak valuation).
This does seem to reinforce Xing as a predominantly German company. I wonder how it might influence their expansion plans versus LinkedIn?
Congrats, Lars, Burda seems like a good fit for Xing
Tim and Eric 4life!
oh I thought you said http://ning.com
Great deal for the founder! The liquidity in the stock was not great, so a blocktrade was not possible!
Sounds good. Reaffirms that not all of Burda’s digital investments are dogs.
I kinda respect those Net operations. What bothers me is valuations of those pie-in-the-sky companies (for example Xing val. is 200M EUR). I mean what is their real value except for wasting user’s time and pretending to do something of a value to a visitor.
They may may be popular during some period, but they may also easily go into obscurity fast. And what will happen with invested money? It will evaporate as fast as it was collected.
Zing!
How can one be a “former XING co-founder”…? Even if he would have left the company, he would still be co-founder, no…?
Despite advertising, invitation specials and affiliate programs are registered in the last quarter, only 400 thousand new members of the Business Network, which is a decrease of over 5 percent. As many applications listed competitor, LinkedIn in just 5 days: http://blog.suxess24.com/2009/11/12/xing-verzeichnet-einbrueche-bei-mitglieder-registrierungen/
Xing in my opinion is still in usability the world’s leading social network. LinkedIn is very very badly designed versus the elegant layout and functions on Xing. Xing should be LinkedIn but then in Europe we do not have the same bold funding strategies like in the US to make it really big. – still Lars, well done for building such an important company. Without it is a GEM.