German media giant Burda has used its digital arm to purchase a 25.1% share in XING, the business social network that is biggest in Germany and competes with LinkedIn. The 1,323,041 shares were sold to Burda by Cinco Capital, the investment vehicle owned by the former XING co-founder Lars Hinrichs. Priced at €36.50 per share, the deal is therefore worth €48.3 million. This makes Burda Digital the largest shareholder in XING. Burda already has positions in Glam Media, the GameDuell startup and Zooplus.
Hamburg based business social network XING continued to grow revenue and EBIDTA in the first nine months of 2009 while profits were smaller than last year. Total revenues from January to September amounted to €33.2 million – or $49 million – up 32 percent from the same period last year (€25.1 million).
XING is floated on the German stock exchange and this new investment by Burda simply re-inforces XING’s profile as a German company. It’s tried to expand internationally, mainly in Asia, but it looks locked into its roots.
The question is, can it maintain its position in Germany forever? Asked recently if LinkedIn would buy XING to further it’s expansion in Europe co-founder Konstantin Guericke said “It’s just not necessary. LinkedIn grows “by the size of one XING every three months”.