Ask YC: What are some startups that took a lot of funding before they made a profit? | Hacker News Reader

Ask YC: What are some startups that took a lot of funding before they made a profit?

4 pointspclark10 comments

I'm looking for startups that have had no/minimal revenues, and took at least two rounds of funding, and then suddenly exploded into profitability (or, are now exceptionally profitable)

Google took Angel, and then VC of $25M ... but (according to pg) were profitable before VC.

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This was a fun mental exercise, and a trip down memory lane...

Salesforce.com had raised over $50M by 2000, and is very successful today. PayPal raised something like $225M (remember getting $5-10 free for signing up?) and is the shining star in the dying eBay galaxy.

I'm sure I'll think of others...

Edit: Also, eHarmony, which raised well over $100M and is supposedly profitable and happy now.

Amazon was founded in 1994 and posted its first profit in 2001. This doesn't quite meet your criteria of zero revenue (Amazon always had some) and going to explosive profitability (Amazon's first quarterly profit was 1 cent per share).

Maybe a pharmaceutical startup would fit your criteria. One that's small enough to be focusing on just a few products, sucking up investor resources in R&D and approval, and then boom. I don't know enough about that world to nominate a candidate company, though. And the drastic contrast is due to regulation more than the business or product.

Is your real question something like "are companies which end up mega-profitable also profitable in the small, early on?"

Twitter is the current example that comes to mind of a company that has raised a few rounds and has no revenues, we'll see how that works out...

i'm looking for past trends to prove this method works (as a way to generate profits evenutally)

blip.tv ?

This is a tough question because as long as a company is in private hands it is very hard to get figures.

First one off the top of my head would be YouTube

Is youtube actually profitable?

Depends on your point of view. Certainly it was profitable for the investors. So is the question has YouTube ever been cash flow positive?

I do not believe that Google breaks out earnings specifically for YouTube, and I am not sure that they differentiate search earnings earned through YouTube as AdSense revenue or for YouTube. But YouTube certainly does generate significant revenue for Google.

http://en.wikipedia.org/wiki/YouTube#Company_history

In March 2008, YouTube's bandwidth costs were estimated at approximately US$1 million a day. [...]

In June 2008 a Forbes magazine article projected the 2008 revenue at US$200 million

YouTube is the poster child of "unprofitable success."

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