Understandably, we respect the fact that co-founder Sokratis Papafloratos doesn’t want to say, and Yell certainly won’t. But this information would be very useful to startups out there wondering what the purchase price is these days for a company like this. So the story basically goes like this.
TrustedPlaces went through a lot in the last few years, including the departure of co-founder and COO Walid Al Saqqaf. To all intents and purposes Papafloratos was left running the site on his own with an outsourced team of developers for the last 18 months.
When I saw him last last year he told me “It’s been quite a year – the toughest and best since we started.”
The first 4/5 months of 2008 were “bad”, the ad market was collapsing and when they went out to look for extra funding (or maybe an exit) in 2008 it was the wrong time and they changed their minds.
But we understand that since July 2009 TrustedPlaces went profitable, and was able to sustain a development team in Tel Aviv, with Papafloratos in London and two interns (one of whom was an ex-banker from Lehman Brothers in fact).
At the start of the year they had a second wind with revenue streams kicking in. Advertising on the site was up, they had a partnership with DMGT with their Local People product (a white label service), and there was transactional revenue coming in from JustEat, Booking.com, BookingBug and TopTable.
It appeared that Qype and TrustedPlaces (by dint of being around so long) were the best known local reviews sites certainly in London, if not the rest of the UK. Things were looking up.
However, we know that for the last 6 to 9 months they were also looking for either more funding or an outright acquisition.
Therefore, we’ve heard from separate sources that the sale was in the “low millions, eg £2-5M”. Another source says “£1m to £2m”.
So we’re going with a £2m sale price to Yell, and probably in cash, though we can’t confirm that.
TrustedPlaces had a Seed/Angel round in 2007 of £500,000 from HowZat Media.
So all in all not a stunning exit. But probably the right one for the founder and the investors.
Since Yell, which is on the ropes anyway, now has a local reviews and recommendation platform, where does that leave Qype?
So far it’s been rumoured to have talked to Nokia. Qype is keeping schtum and despite some chatter earlier in the year we’ve heard nothing since. Founder Stephan Uhrenbacher is now Chairman and busily being an Angel investor in green startups in Germany.
Yahoo!, which is also poised to sign a deal with Nokia, has its own local reviews product, Yahoo Local. It doesn’t need another one, and likely as not Yahoo Local will end up integrated into Nokia handsets. There is no incentive for Nokia to do this with another third party, especially a small one.
So, what next for Qype if Nokia and Yell are no longer in the market for a local reviews site? Who on earth can they exit to? Tell us your theories below.