Facebook backer seeks $1.2b for tech fund

Digital Sky Technologies, a Russian firm that invested in Facebook, is looking for US$1 billion for a brand new late-stage technology fund under a year after raising its last pool, promising investors a stake inside the social-networking site in return.

DST has committed Facebook stock worth US$50 million ($60.9 million) to the fund, meaning limited partners get an opportunity to possess the shares through their investment, said an investor presentation obtained by Bloomberg News.

Early investors were offered the Facebook holding at a 12 per cent discount to an internal valuation of about US$74 billion, in addition to a 25 per cent reduction within the fund's management fee.

DST, founded by Russian technology investor Yuri Milner, is among quite a few venture capital and buyout firms seeking money after the most important year for US internet initial public offerings in additional than a decade.

Facebook backer Elevation Partners and Zynga investor Institutional Venture Partners are each seeking up to US$1 billion for his or her next funds. DST's investments in companies including Facebook, Groupon, Twitter, Zynga and LinkedIn have buoyed returns.

The firm's first fund, DSTG I, has returned a 4.89 times the invested capital, before fees, and produced an annual 151 per cent gross internal rate of return, said the December presentation.

DST Global III plans to make non-controlling investments in late-stage private companies within the global internet industry with a valuation of at the least US$500 million. Goldman Sachs Group is acting as placement agent for the fund.

DST gathered US$867 million for its prior fund, which was formed in late 2010. Of the entire, US$792 million was invested in 10 companies last year, the December presentation said. The firm invested US$37.5 million in online digital music company Spotify in June 2011 and US$36.7 million in Airbnb in July.

Its highest-profile holding is Facebook, that's looking to raise US$5 billion in an initial public offering which could value the corporate at US$75 billion to US$100 billion.

DST first invested within the social-networking site in May 2009 and bought "substantially" every Facebook common share traded from September 2009 to February 2010, said the investor presentation. DSTG I invested a complete of US$490 million during that period within the company at a US$10.8 billion valuation.

- BusinessDesk

By Serena Saitto