Yahoo has a knack for bailing out bombing businesses. This time, they're saving Flurry: a mobile analytics startup that just took on $10 million in debt as it struggled to find an exit.
Selling to Yahoo would once have been inconceivable. Rumors of a Flurry IPO began circulating in 2012. And last fall, the company's CEO Simon Khalaf told Business Insider that taking the company public was "inevitable."
There has been gossip about a possible Flurry IPO for months now. Large adtech companies are often aimed specifically at IPO "exits," so that their venture capital funders can get a payback on their investments. [...]
When we asked Khalaf about an IPO exit, however, he was refreshingly direct: "I consider an IPO an entrance," he tells us. "We don't have a choice, our volume is too high and our scale is too big for anyone to absorb us."
Yet Flurry is being absorbed, and for far less than Khalaf promised.
According to TechCrunch, the company originally wanted to be sold for $700 to 800 million, possibly to Amazon. But the company was ultimately purchased by Yahoo for a rumored $200 to 300 million—a markedly low amount, considering venture capitalists sunk $73.3 million into Flurry since 2007.
TechCrunch credits the app Secret for breaking news of Flurry's sale. However, another secret posted in late June could help explain the company's firesale price.
We reached out to Flurry for comment on the layoff rumors but never heard back. However, SEC filings from May of this year confirm that Flurry was sniffing around for more money. A Form D shows that Flurry closed $10 million in debt financing, presumably because the $12.5 million equity round they raised just five months prior didn't stretch as far as they hoped.
Despite Flurry's failure to hit it's "inevitable" IPO, Khalaf celebrated the sale on the company's blog.
Six years ago, during the worst financial crisis since the great depression, we started working with mobile app developers. They were "the crazy ones, the misfits, the rebels, the troublemakers." At a time when many were questioning the viability of the US economy, let alone the tech sector, these developers left stable jobs and started companies to build mobile applications. [...]
Today, Flurry is entering a new phase of its life. I am excited to announce that we have reached an agreement to be acquired by Yahoo and expect to be joining Yahoo very soon. [...] Yahoo is committed to being a part of consumers' daily life on mobile.
Why not celebrate? He just became the next David Karp.