“More and more young technology companies are achieving a $1 billion valuation, but not all of them are destined to become the next Google or Facebook.
The billion-dollar club is expanding even faster than at the peak of the dot-com bubble, The New York Times reports.
In 2011 through 2013, at least 34 investments were made valuing companies at $1 billion or more, compared with 16 from 1998 through 2000, according to Dow Jones VentureSource data cited by The Times.
One problem child is Fab.com, which sells clothes and home wares online, The Times notes. The company’s early strong growth drew renowned venture capital investors such as Andreessen Horowitz.
And a $150 million investment in June valued the company at $1 billion. But that didn’t last. Financial problems hit, and the company unloaded hundreds of workers.
Tales like Fab.com have some experts concerned that another technology bubble is brewing.
“Where we are today, I don’t see where the values are coming from based upon any judicious or even very optimistic view of a company’s future cash flow and revenue,” Brian Hamilton, chairman of Sageworks, which analyzes the financial conditions of private companies, tells The Times….”
If you enjoy the content at iBankCoin, please follow us on Twitter
