Yelp Gets $100M from Elevation

Most of you have probably already seen this news: Yelp Receives Investment From Elevation Partners:

Yelp, the community-led local search site, today announced that private equity firm Elevation Partners has agreed to make a $25 million investment in Yelp through the purchase of Series E preferred stock. Elevation Partners will also seek to increase its total investment in Yelp to $100 million through a planned purchase of shares from vested employees and other eligible shareholders . . .

Yelp plans to use the additional funding to deepen its market leadership position throughout the US, accelerate growth in Canada and throughout Western Europe, and continue the development of innovative mobile applications.

This is 2X what TechCrunch originally reported as a rumor a week or so ago. Some vested employees will make money without the company having to go public.

Yelp’s ongoing challenge comes in selling ads and in acquiring more SMB customers; it has built a very successful brand on the consumer side. But it has a 200-person strong telephone sales operation that it will probably enhance further with some of these funds.

Not much more to say right now, but I will write more after I speak with the company.

6 Responses to “Yelp Gets $100M from Elevation”

  1. Ben Saren Says:

    This should be very interesting to watch. The challenges you’ve always described, along with others, are not small ones. It seems like there would have to be a pretty radical shift in their approach to the market to really monetize the SMB space like they potentially could (and like their investors will likely expect them to). No doubt they’ll have the resources to do that, but it will be interesting to see how this changes Yelp’s approach to SMBs and what kind of value they can really deliver for mom-and-pops – the market at hand.

    This is great activity for the local space, but also a bit scary for many of us. A rising tide lifts all boats right? I wonder what a tidal wave does… We shall see.

  2. Kyle Kazak Says:

    @Greg,

    Do you think that Yelp actually used the Google deal as leverage to raise this capital? It sure seems that way to me. They threw out the hook, Google nibbled and the media exploded. Valuation was raised now they are taking 100MM, jeeze.

  3. Malcolm Lewis Says:

    I’d love to see the investment thesis. I don’t get it, but I don’t get the Kindle either so what do I know.

  4. Greg Sterling Says:

    Kyle:

    I’ve heard something to that effect, though I’m not sure whether it was entirely a ploy. The Google conversation could well have been in earnest but my guess is that there was some “use” of techcrunch and the Google negotiation to boost the company’s valuation for this round

  5. Follow Up on Yelp’s $100 Million « Screenwerk Says:

    […] Screenwerk Greg Sterling’s Thoughts on Online and Offline Media « Yelp Gets $100M from Elevation […]

  6. AhmedF Says:

    You have to see e-ink (vs a traditional screen) to get the Kindle Malcolm. If I didn’t love the feel of hardcover books (poo paperbacks) I would have bought one myself.

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