Social network creator Ning raises $60M at $500M valuation
Make-your-own-social-network company Ning has raised a $60 million fourth round of funding. — Co-founded by Netscape founder Marc Andreessen, Ning already raised a hefty third round of $44 million back in July.
Context & Ripple Effects
Ning had already completed a previous investment round in July 2007 and reported more than 100,000 social networks created on its platform by September. The new financing ties that early network-creation scale to a $500 million valuation.
Marc Andreessen's co-founding role gives the company a high-profile backer, while pickup by Fast Company and Valleywag indicates that Ning's financing was being framed as a notable social-networking story.
First-order effects
- Ning gains $60 million to fund its platform and operations, giving the company more capacity to serve and attract the creators behind its network base.
- Ning's founders and investors secure a $500 million valuation, making the company’s growth in created networks a central measure of its financing case.
Second-order effects
- Organizations and individuals building communities on Ning gain a better-capitalized platform provider, reducing the near-term risk that its expansion is constrained by funding.
- Other social-networking services seeking investment face a clearer comparison point: investor interest is attaching value to platforms that enable many separate communities, not only to a single destination site.
Third-order effects
- If investors continue to reward network-creation scale, social networking may develop around platform operators that aggregate many niche communities rather than a small set of standalone sites.
- The round points toward a funding market in which user-created network counts become a key proxy for a social platform’s ability to build distribution and monetize attention.
The trend: Social networking is evolving from individual destination sites toward infrastructure platforms whose value is tied to the scale of communities created on top of them.