Digital Sky Technologies co-Founder Yuri Milner recruited analysts from Goldman Sachs Group Inc. and Morgan Stanley to help him pick investments in startups such as Facebook Inc. and Zynga Game Network Inc.
Digital Sky paired with the New York-based securities firm to buy a $500 million stake that values Facebook at $50 billion, sources said. Groupon Inc., another Digital Sky-backed company, plans to take as much as $950 million in funding from a group that includes Digital Sky and Morgan Stanley, also based in New York."DST's investments in Facebook, Groupon and Zynga have done very well and I think Goldman and others are trying to take advantage of that," said Nick Beim, general partner at Matrix Partners, a venture capital firm based in New York.Digital Sky invested $200 million in Facebook in May 2009 at a valuation of $10 billion.
It has since increased its stake by purchasing common shares, including employee shares in a $100 million offer, according to two people familiar with the matter.At $50 billion, Facebook would exceed the valuation of Web portal Yahoo! Inc. and online commerce site EBay Inc. The valuation is 25 times Facebook's 2010 revenue, compared with 7 times sales for Google and 4.7 times for Netflix Inc.