Facebook borrows $100m to fund future growth

by Jacquie Bowser Brand Republic 13-May-08, 09:45

LONDON - Facebook has borrowed $100m (£51m) to fund its growth and is looking for a new chief technology officer.

Venture lending firm TriplePoint Capital is providing the financing, which Gideon Yu, Facebook chief financial officer, said will be used entirely for servers and data centres.

According to Facebook spokeswoman Brandee Barker, the equipment lease financing frees Facebook of the need to raise further venture funding that would dilute existing shareholders.

Market sources said that the funds would buy as many as 50,000 more servers. Facebook has to date raised about $360m from loans and selling equity.

Yu told The Wall Street Journal that the borrowing will provide the company with greater stability: "Raising debt should be a sign that we're entering a more mature phase."

Microsoft invested $240m in a 1.6% stake in Facebook in October last year and Hong Kong billionaire Li Ka-shing has since invested a total of $120m in the company as well.

The website has experienced extreme growth over the past year and Facebook claims it now has more than 70m active users (those who have visited the site in the last month).

Comscore reported that Facebook's monthly unique users jumped 240% from March 2007 to 2008. The research firm said that the social networking site's unique users total 109m.

At the same time the social networking site is looking to replace its 23-year old chief technology officer after Adam D'Angelo left the company.