Facebook raises $1.5 bn in new, Goldman-led funding

Facebook yesterday said that it has raised $1.5 billion in a new round of funding led by global investment bank Goldman Sachs, valuing the world's popular social networking site at $50 billion.

Facebook said that it had raised $500 million from Goldman Sachs and existing investor Russian investment firm Digital Sky Technologies (DST), (See: New funding from Goldman and Digital Sky values Facebook at $50 billion: report) and $1 billion from overseas clients of Goldman Sachs.

The round of funding values California-based Facebook more than companies like Yahoo, e-Bay and Time Warner, but below Google and Amazon.

''Our business continues to perform well, and we are pleased to be able to bolster our cash position with this new financing,'' said David Ebersman, Facebook's chief financial officer. ''With this investment completed, we now have greater financial flexibility to explore whatever opportunities lie ahead.''

Facebook said that under the transaction's terms, it had at its discretion the option to accept between $375 million and $1.5 billion from the Goldman Sachs overseas offering, and although the offering was oversubscribed, it made a business decision to limit the offering to $1 billion.

However, it did not assign any  reasons for limitin the offering to $1 billion and said that it has no immediate plans of deploying the money raised.
 
Facebook had originally planned to allow investors in the US to take part in the new round of funding, but later decided to limit it to investors overseas on concerns that it may attract the US Securities and Exchange Commission's concerns that extensive media coverage could violate US securities guidelines governing private placements.