Less Capital, More Business Puts New Spin on Social Networking
November 07, 2012
Last year's big deals in the social networking realm? Facebook. Tumblr. Twitter. This year's biggest rounds? Yammer. Quirky. Lithium Technologies. Is it a big surprise that the largest social networking investment this year was for an enterprise software company? Companies seem to be expanding their enterprise-level social networking products with renewed vigor this year. Freshly funded BUMP Network is no exception; the company offers custom social networking services. These offerings have't exactly translated into big funding—capital invested in the social networking space has dropped off dramatically this year and there are fewer megarounds—however, the deal count has more or less kept up with last year's pace. After experiencing an increase for four consecutive years (2008 through 2011), late stage social networking deals have contracted to 24% of the total activity in 2012, down from 31% last year. Altogether, investors have completed 747 VC financings in the social networking space since 2007, according to the PitchBook Platform, with 2011 garnering the highest marks for deal count and total capital invested.
*2012 to date.
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