Klout, Social Scoring Startup, Acquired For $100 Mil
Klout, a San Francisco based Social Media Scoring startup, has been acquired by a marketing company, Lithium Technologies, for $100 million. Throughout the years, Klout has tried to optimize their site to improve their products. A few days before their acquisition, the startup revamp their website that helped Klout users identify how to increase their scores. Nevertheless, 100$ million is a huge buyout. The startup will be changing their game plans.
Klout’s Startup Journey
The San Francisco based company has been through it’s ups and downs. The startup originally started back in 2008. This was the time when Linkedin, Twitter, and Facebook were still in their startup phrase. Klout had one easy and single goal, that was to be able to connect all the social media metrics together and rate it. These scores would earn you points that you could use on their perk shop. The idea was awesome and it kept the boat going. The biggest problem was that Klout was optimizing their algorithms too often. To the point where users were getting confused on what to do or how to increase their score. Just about a week ago, Mashable made a post asking if you still view your klout score. The article spoke about how the startup isn’t going anywhere with their update and plans.
A good deal for Lithium Tech.?
The reason so many people would argue that this was an amazing and worthit deal for Lithium Tech. is because Klout originally was valued at 200 mil. Their last round of funding was 30 million and received a total of over 40 million in funding. Usually, companies are sold for beyond the post valuation price, but this time it the startup was sold at half the valued price. What does this mean for Venture capitalist that invested in the startup? It does not mean that the VCs did not make any money off this deal. They still made their returns, but this probably was not the return that they expected for such a long run (5-6 years). It is always still good to make a dollar out of 50 cents though.