LinkedIn, the online professional networking platform, received $53 million in a second round of funding from investors for a reported 5 percent share in the company.
That puts the value of LinkedIn at an estimated $1 billion. With 23 million members, that investment — and valuation — represents $43.48 per member.
LinkedIn CEO Dan Nye said Bain Capital Ventures joins LinkedIn’s existing investors, Sequoia Capital, Greylock Partners, and Bessemer Ventures. The company previously raised $27 million from investors.
Nye, writing on the LinkedIn blog, said the funding will help the company develop features to help its members build relationships and exchange knowledge.
Recently, LinkedIn made it possible for businesses to use the network as a marketing tool. For instance, a business can promote its profile on LinkedIn with targeted display ads, sponsorships of the “Answers” category, among other measures, according to Harry Gold, chief executive of Overdrive.
LinkedIn, according to the LATimes.com, has said it could generate as much as $100 million in revenue this year from premium subscriptions, advertisers, job listings and more. In a video posted to the LinkedIn blog, Greylock Partners’ David Sze hinted the company would soon add new revenue streams.
“The fact that they have three revenue streams and a couple more coming on creates a diversity that is incredibly powerful in a company’s growth,” he said.
Advertisers are willing to pay CPM rates as high as $75 for display ads on LinkedIn, far more than rates on social networks, according to one report.
LinkedIn’s still tiny compared to other social networks when measured by unique visitors. It recorded 3.9 million unique visitors in May, up 138 percent from a year ago, according to comScore. In contrast, MySpace had 73.7 million unique visitors in May, followed by Facebook’s 45.8 million.
And the investment in LinkedIn is small by comparison to a stake Microsoft took in Facebook in October. Microsoft invested $240 million in the social network, resulting in a $15 billion valuation for the privately held company. In that deal, Microsoft also became Facebook’s exclusive advertising partner.