- PeHub, Thursday, July 23, 2009 2:47 PM
Various news outlets are reporting that Amazon.com has purchased fellow ecommerce site Zappos for 10 million Amazon shares, or $880 million, plus another $40 million in cash and restricted stock for
Zappos employees. As TechCrunch's Sarah Lacy points out
, "This is a great exit for Zappos' investors", which
include Sequoia Capital and Venture Frogs, at a particularly dark time for venture capital firms. She notes that approximately $60 million was sunk into the company in seven rounds.
However, according to PeHub, the decision to sell Zappos to Amazon was pushed very heavily by Sequoia, in particular, and that Zappos CEO Tony Hsieh preferred to wait for the IPO market to recover.
Said one source, a Zappos shareholder who has seen the company's income statements: "When Mike [Moritz, a GP with Sequoia] came in, he came in at a high valuation, but he countered that with
a very high liquidation preference. It puts management on one side of the table and investors on the other. Then there's always pressure to sell the company."
The report adds
that at least two sources who do not hold board seats, but are directly involved with Zappos, said that Moritz and Hsieh came into conflict about the company's future. Moritz, they said, wanted
Zappos to sell while Hsieh wanted to remain independent.
Read the whole story at PeHub »