The Skype Deal in Numbers

• The investor syndicate received 65% ownership in Skype for about $1.9 billion in cash and $125 million in debt
• New venture fund, Andreessen Horowitz invested $50 million, or 1/6^th of its  fund a stake of ~2%
• This deal valued Skype with a valuation of ~$2.75B
• Skype has 405 million users, meaning the buyers paid about $5 per registered user
• Registered Skype users increased by 47% in 2008 over 2007 and Skype continues to attract hundreds of thousands of new users each week
• According to Peter Falvey of Revolution Partners Skype is likely to do revenues of between $600 million and $650 million this year
• Based on these numbers, the deal valued Skype at about 4.5x revenues
• During eBay’s ownership period, the investment produced a negative 6% IRR, however, it still beats the S&P 500’s negative 10% IRR during the same period with
• eBay posted $8.54 billion in revenue in 2008 with Skype contributing a paltry $550 million, or ~$1.35 per user
• eBay’s value as a whole has declined by ~25% per year since acquiring Skype

Tagged as: deals, ebay, marc andreessen, skype