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Who won in the booming Yelp debut

From Bessemer, Elevation to Benchmark, Yelp's CEO: many execs are smiling after 63% pop

Technology trends and news by Krystal Peak
March 2, 2012 | Comments
Short URL: http://vator.tv/n/24c5

Online consumer-review site Yelp had one stellar day. The first day of public trading for the eight-year-old company started with a serious bang when, the already high IPO price of $15 (which was above the projected $12-14 range) was blown out of the water when trading started at $22. That initial 30% excited investors that, at one point drove the stock up to $26 before it closed the day at $24.50 -- an impressive 63% bump for its debut day.

And for a company that has yet to turn a profit, this showing has several investors and executives popping champagne.

Over the last eight years, Yelp has raised more than $56 million from VC firms and various angel investors and has catapulted Yelp's management team into a whole new tax bracket. 

Investment firms that are reaping the jet-propulsion Yelp experienced on its first day of trading including Bessemer Venture Partners which led a $5 million round in 2005, Benchmark Capital which led the Series-C funding of $10 million in 2006, DAG Ventures which led the $15 million funding round in 2008 and Elevation Partners which led the $25 million Series-E funding at the opening of 2010.

Coming in at the top of the winners' list is Bessemer Venture Partners. The firm's participation in backing Yelp since 2005 has resulted in the receipt of 11.7 million shares of the company, which equates to $286.7 million. Bessemer also retains the largest share of voting power for the company at 22.1%.

Next in line are the executives and entities tied to Elevation Partners which contributed the single largest round of funding just two years ago. Elevation holds 11.6 million shares of the company and will be adjusting the company balance sheets to the tune of $284.2 million.

This includes the shares held by Fred Anderson, a managing director and Co-Founder of Elevation Partners.

Anderson was the executive vice president and CFO of Apple Computer in years past and continues to invest in landmark tech innovations across the globe.

 

 

Benchmark Capital clocks in the fourth greatest gain from the Yelp IPO with its 8.4 million shares, now worth $205 million. Peter Fenton is greatly to thank for this investment choice.

Back in 2006, Fenton joined Benchmark Capital and has invested in: Coremetrics (acquired by IBM), FriendFeed (acquired by Facebook), JBoss (acquired by RedHat), Reactivity (acquired by Cisco), SpringSource (acquired by VMWare), Terracotta (acquired by Software AG), Xensource (acquired by Citrix), and Zimbra (acquired by Yahoo!).

 

 

 

Former mentor to Yelp CEO Jeremy Stoppelman, Max Levchin, who provided the Series-A funding of $1M in July of 2004, recieved 7.1 million shares valued at $174 million. Levchin is the founder and CEO of Slide, which has created popular Web applications on Facebook, desktop platforms, and elsewhere.

Now, as chairman Yelp, Levchin is benefiting from his ground floor investment on a company trading at a relatively high multiple right out of the gate -- at more than 10 times revenue. Prior to Slide he was the co-founder and CTO of PayPal, which was sold to eBay for $1.5 billion in 2002. Levchin also retains more voting power than the CEO, with 13.5%.

Jeremy Stoppelman, Yelp CEO doesn't just have the top spot at Yelp, but is holding the most shares within the company's executive team, with 5.9 million shares, valued at $144.6 million.

 Prior to Yelp, Jeremy was the vice president of engineering at PayPal. Stoppelman founded Yelp in 2004 with the financial backing of his mentor Max Levchin.

Stoppelman also maintains 11.1% of the total voting power in the company. 

 

 

Geoff Donaker, Yelp COO, is holding just north of 900,000 shares of the San Francisco company which brings his stake in the company to $22 million.

Prior to Yelp, Donaker spent five years building Web communities at eBay and joined Yelp in 2005 to head business development. Donaker has held the role of COO since 2006.

 

 


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