Facebook Raising Another $100 Million to Fund Increasing Server Costs
Facebook is growing like gangbusters both domestically and internationally, but it costs a lot of money to push billions of photos around the world every day.
In order to help fund its ever growing infrastructure, Facebook has been trying to secure an additional $100 million in debt financing recently, BusinessWeek reports. Facebook would likely use the proceeds to finance leases on more servers.
A Facebook spokesman says the effort is simply part of the normal course of business. Equipment leases offer lower up-front costs and certain other advantages over purchases. “Facebook always seeks to keep its costs of capital as low as possible, particularly in these uncertain economic times,” the company said in a statement issued to BusinessWeek. “Along with other Silicon Valley companies, we rely on a range of tools to do so, including equipment lease lines to acquire equipment.”
It was this time one year ago that Facebook closed a $100 million line of credit from TriplePoint Capital. At the time, Facebook reported 70 million active users. Today, Facebook reports over 175 million active users. 70% of new users are outside the United States.
While we don’t know exactly how much Facebook spends on equipment lease lines, it’s likely “tens of millions of dollars a year,” Frank Gillette of Forrester says. Facebook has drawn down $60 million of its $100 million credit line from TriplePoint, BusinessWeek reports.
To date, Facebook has raised at least $440 million in total debt and equity financing, including $240 million from Microsoft in 2007 as part of a preferred equity investment and strategic alliance that valued the company at $15 billion, $100 million investment from Chinese billionare Li Ka-Shing in early 2008, $100 million loan from TriplePoint in May 2008, and an undisclosed investment by Germany’s Samwer brothers early last year. The Samwers are also investors in German Facebook clone StudiVZ, which Facebook is currently suing.



March 26th, 2009 at 5:51 pm
“The Samwers are also investors” – were.
March 28th, 2009 at 3:03 am
[...] Facebook Raising Another $100 Million to Fund Increasing Server CostsMarch 26, 2009 [...]
March 31st, 2009 at 1:19 pm
[...] undisclosed investment by Germany’s Samwer brothers also early last year, and another potential $100 million equipment lease line very [...]
April 26th, 2010 at 3:39 am
Personally I hope FB sinks.
Chinese guy invested when China blocks the site? Smart move dude. FB should just block countries that aren’t going to use a credit card on their stuff anyway. Should have stayed restricted to colleges guys. You tried to be too many things to too many people and now you screwed it up and are too incompetent to fix it. Like the idiotic “fan” pages that are FAR from official.
That 15bill is way overestimated. College students who were still the majority at the time, don’t have a penny to their name. And as you pointed out, these are not prosperous times. People are unemployed because government officials have a reading and math level approximating that of the 12 yr olds who create bogus “fan” pages.
I think I’ll just upload 100 duplicate videos to FB just to take up rack server space.
May 19th, 2010 at 4:50 pm
[...] Buy new Facebook Servers [...]