Startup Sold on eBay for $258,100 (or: eBay turns iBanker)
A web-based calendar startup called Kiko put all of its assets up on eBay a little over a week ago as its founder explained on his blog. As far as I know, this is the first time a technology company has essentially sold itself on eBay for a six-figure amount. Seems like a fitting way to exit for a totally web-based company. Putting Kiko on the auction block caused a lot of buzz: Techcrunch placed Kiko in the deadpool (they seem to have taken a page from Pud), GigaOM called the space "crowded" and our most recent podcast guest Jason Calacanis reminded us revenues (rev-a-whats?) still matters for a business.
One of the most interesting parts of this transaction is that eBay -- along with all the publicity generated about the auction -- essentially acted as the investment banker for this deal, not that any self-respecting i-banker would touch a deal this small with a 10 foot poll. According to eBay's fee schedule, eBay netted a cool $3,891.86 on this deal. After larger percentage fee on the first $1,000, eBay charges 1.5% of the closing price. You can only get that kind of low rate with pro i-bankers at the $100 million mark according to past guest Fabrice Grinda's blog post. Can selling companies on eBay scale and create a more efficient market for startups, or is this a one off success caused by a high profile failure?
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A meta-search engine called jux2.com sold on eBay about 1 year ago, for just over $100K.
Posted by: Greg Gershman at August 26, 2006 8:47 PM
I definitely find this an interesting development as Ebay becomes more and more an outlet as an exit market for sub $500k startups.
This could yet be another defining trend over the next 24 months as Web 2.0 matures.
Posted by: sharpshoot at August 27, 2006 8:21 PM
I thought you might be interested in hearing why we bought Kiko.
Posted by: Ken Schafer at September 5, 2006 6:08 PM