2008's year of the rat will remain a memorable one for many reasons including the surprising and disturbing changes in the markets and economies around the world. As for Felicis Ventures, it was the best year so far in its brief three year history: 2008 brought no less than 3 exits: Powerset (sold to Microsoft), Social.im (sold to iSkoot) and Sendori (sold to IAC) which was just recently announced.
2008 was also a year where the firm’s investment pace remained strong with about a dozen deals and major milestones including following highlights:
- Mint.com was selected as the "2009 Technology Pioneer" by the World Economic Forum
- Tapulous' Tap Tap Revenge exceeded 250K downloads in less than 4 days and 5M downloads in just 6 months (it then went on to win a Crunchie in early 2009)
- Social Gaming Network reached over 50M installed users and 1M daily players
- Mochi Media's MochiAds now reach more than 70 million unique users a month through Web-based Flash games that use Mochi Media's ad-serving technology
- Disqus was able to grow its reach more than 15-fold to around 1.7M unique users
- Following the launch of its interface in many languages, Justin.tv experienced a more than 9-fold increase in monthly visits to the site
- Venturebeat was syndicated by New York Times
- Meraki went "green" with its first solar powered Wi-Fi gear and
- Weebly reached 1M users and profitability
Some of Felicis Venture's most recent investments like Posterous have more than doubled users in December of 2008 and closed a seed financing round despite one of the worst downturns.
Rapidly deteriorating venture investment and exit numbers point to tough times ahead: according two recent reports by NVCA (on VC fundraising and Exits), Venture Investment fell 60% in Q4 of 2008 from the previous quarter, while proceeds from disclosed M&A transactions fell by 55% and IPO proceeds fell about 95% (!) in 2008 compared to the previous year. In my opinion, the trend is likely to continue in 2009 where the surplus of venture capital raised in the last 5 years is still sustaining a lag in valuations (and valuation expectations) while potential corporate acquirers are likely to stand by in the sidelines – at least for larger deals, in anticipation of even lower valuations towards the end of the year.
Given the current climate, I feel extremely proud of being a part of the Felicis portfolio companies' tremendous success in 2008. I look forward to strongly support the founders I work with in their quest to make the best of these turbulent times, to turn the year of the ox into a bullish one.
