Slide: The $500 Million Widget
After cashing in big with PayPal, Max Levchin could be at it again with his social network tool. The latest funding values Slide at a half-billion — When Max Levchin started Slide, the popular tool that lets users create slide shows and other bling …
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Slide's rise has been quick and cheap by acquisition standards: Business Week profiled the widget boom back in May 2007 (Sharing the Widget Wealth), and by June Slide had picked up the Favorite Peeps Facebook app for just $60,000 (a small tuck-in buy). By December, confirmed reporting showed Slide holding the single most popular Facebook app with Top Friends, with Slide and RockYou together controlling most of the biggest apps on the platform.
The $500 million valuation now attached to a slide-show-and-bling tool marks the moment the widget business graduated from novelty to serious venture asset — and it validates founder Max Levchin's second act after PayPal, part of a broader pattern of former PayPal employees leaving the payments company to become serial entrepreneurs across Silicon Valley.
First-order effects
- Slide enters 2008 with half a billion dollars of implied valuation and fresh capital, letting it outspend rivals like RockYou for app distribution on Facebook, where it already holds the top spot with Top Friends.
- Levchin's post-PayPal track record is now formally bankable — investors have priced his second company at levels that make him a magnet for both talent and future deals.
Second-order effects
- RockYou, the other owner of most major Facebook apps, faces pressure to raise on comparable terms or cede the arms race for app placement, pushing valuations up across the widget category.
- Independent Facebook app developers see their asking prices inflate — Slide's $60,000 Favorite Peeps purchase sets an early floor that this round makes look like a bargain.
Third-order effects
- If the pattern holds, the social-app economy consolidates around a few well-funded portfolio owners rather than independent developers, with distribution on platforms like Facebook becoming the scarce, priced asset.
- Slide's valuation rests entirely on real estate it does not control — another company's platform — foreshadowing the platform-dependence question that will hang over every widget maker whose audience lives inside someone else's social graph.
The trend: Consumer-web startups are attracting nine-figure private valuations on distribution and audience rather than revenue, with ex-PayPal founders recycling their credibility and capital into the next wave of ventures.