Congratulations to Fotolog for their pending sale to French company Hi-Media for $90mm. This is a great event for the company as John Borthwick, current CEO, helped stabilize the infrastructure and prepare the company for further growth. It was John who also first introduced me to the company in July of 2004 when I decided to participate in their angel round. At that time the company had around 300k or 400k members and did not have the backend technology to scale further. The company had 3 full time employees and had a nice problem on its hands-it had to limit its growth because it needed more capital to scale and meet user demand. Yes, there was no revenue model at the time but it was quite clear how engaged the audience was and we knew that we could eventually layer in contextual advertising and other sources of revenue. Strategically, what the company did well was go with the flow and recognize that most of its audience was global and that one day down the line, having a global, engaged audience would be worth some real dollars. Rather than try to make it more US oriented, the company stuck to its core user base and ultimately realized a nice exit having grown the registered accounts in 3 years to over 10 million! Once again, great work to John and to two of the cofounders, Adam Seifer and Scott Heiferman, for recognizing where the value was and creating a nice return for all of the shareholders.
Published by Ed Sim
