Tiger Global, which also invested recently in online game developer Zynga, now has a 1% stake in LinkedIn. Reportedly, the investment firm paid $21.50 per share. Both LinkedIn and Zynga are widely viewed as IPO candidates.
"It's relatively low risk for these companies to buy pre-IPO and gives them the benefit that generally they're going to trade up," said Ted Hollifield, a partner at law firm Dorsey & Whitney LLP, who works with venture capital firms and startups, told Bloomberg.
Neither LinkedIn nor Tiger Global would comment to Bloomberg.
The site, which was founded in December 2002 and launched in May 2003, had 29 million users in the fall of 2008. At that time, following additional funding from SAP Ventures, Goldman Sachs, and the McGraw-Hill Companies, LinkedIn was valued at $1 billion.
The company earns revenue through its premium subscription business; ad sales, and via its corporate recruitment solutions. In 2008, LinkedIn was on track to earn revenue of $100 million, according to published reports. In 2009, the company's ad sales were up 50% year-over-year and the business was still profitable, CEO Jeff Weiner told Business Insider.
LinkedIn has about 70 million members, and executives from every company in the Fortune 500 are represented on the site. Three-quarters of its network are university educated and 50% of LinkedIn's members are in decision-making positions, according to SharesPost.
Members span 200 countries and the site is available in English, Spanish, French, and German. For example, LinkedIn's Indian membership recently surged to 5 million members.
Although Facebook use is far more widespread -- that site just hit the 500 million user milestone -- LinkedIn has many loyal account-holders. In one study of mobility engineers who work in the aerospace, automotive, and commercial-vehicle industries, LinkedIn was the biggest draw, with 84% of respondents saying they use the site, followed by 59% who said they use Facebook.