Google has sold $17m of gaming company Zynga’s stock as part of the company’s $1bn initial public offering on Nasdaq. Zynga priced at the top of its $8.50 to $10 per share range, providing the valuation of shares sold by Google, according to news provider Bloomberg.
Google was reported to have invested more than $100m in Zynga last year, suggesting it has made a circa 2.3 times paper return.
Google will retain the remainder of its shares, which are worth $216.2m based on the reported valuation of Zynga’s stock, according to the company’s S-1 filing with the Securities and Exchange Commission.
Other corporate venturing units, such as Japan-based marketing chain management company Transcosmos, are also in line for big returns, after taking shares in the online gaming company having sold its portfolio company Unoh last year. Transcosomos sold portfolio company Unoh to Zynga to help the US company expand into Japan and an insider said it would make a four-times return from its about 1% holding. Transcosmos is not mentioned in the filing, suggesting it has retained all its stake in the listing.
Underwriters of the flotation are Morgan Stanley, Goldman Sachs, BofA Merrill Lynch, Barclays Capital, JP Morgan and Allen & Company.
The shares are set to make up an about 14.3% stake in the company, news provider the Wall Street Journal said, valuing the company at about $7bn. Google now holds 4.1% of Zynga’s shares, which will go down to 3.8% as part of the flotation, valuing its stake at approximately $270m.
Zynga has raised more than $845m from its three funding rounds, including a $490m series C round, in which Google was reported to have invested.
The valuation of other venture capital shareholders in the company also performed strongly, based on the reported offering price:
Kleiner Perkins Caufield & Byers has stock worth $651.6m, retaining all of it.
Institutional Venture Partners retained stock worth $318.4m and sold $24.9m in shares.
Union Square Ventures retained $285.1m in shares and kept $22.3m.
Foundry Venture Capital held $320.6m in shares and sold $25m. Avalon Ventures kept $321.7m and sold $25.1m.
Private equity firm Silver Lake Partners held $216.2m and sold $16.9m.
Mail.ru Group, the London-listed internet business, retained shares worth $96.5m and sold stock worth $7.5m.
Tiger Global Private Investment Partners, the hedge fund, retained $71m, and sold stock worth $5.5m.
DST USA, an affiliate of Russian venture firm Digital Sky Technologies, retained $28m in stock and sold $2m.
The executives of Zynga retained all their stock, with $917m of this stock held by chief executive Mark Pincus.