From the article:
"The elegant Flipboard–which McCue recently told me in an onstage interview at the South by Southwest conference in Austin had zero revenues thus far"
Like the last internet bubble, companies with no revenue are valued higher than companies with revenue. I guess having no revenue obscures the difficulty in monetizing the business.
I think it's an interesting app, but... with all their content provided by other people, and a purposely simple, procedurally-generated interface, what the hell do they even need $50m for? What investor would say "yeah that sounds like a reasonable amount to continue developing an app that is already pretty much done" - I'd like to meet him.
This is one of those investments where vcs looking to ride waves (read social/mobile/cloud) + Mike McCue is a serial entrepreneur. Statistics are in favor of those two.
ipad's killer app is still browsing, and magazines. These guys might become digital press for all the magazines and newspapers out there.
The founders/early investors could have been taking $ off the table so it wasn't all new shares... Just a possibility.
Hoŵ the f is this worth $200m?
A better question is how the investors who came in at $200m expect to get a decent exit . . .
And what in the world are they going to spend $50 million on?
At least they had released an app before going for funding.
Do you hear that? It's the sound of a bubble just before it breaks. Better raise that next round now, fellas.
I like Flipboard, but... how are they going to reach a decent enterprise value/sales ratio?
Funding is going crazy....it was Color last time, now it is Flipboard...just for APPs. Sounds like another Bubble.