Index makes millions from Last.fm exit(2)

The founders of Index Ventures-backed internet site Last.fm have sold the business to US television network CBS for $280 million. The sale has reportedly generated a $56 million profit for Geneva-based Index Ventures.

Last.fm, the UK radio and social networking website backed by European firm Index Ventures, has been bought by CBS, the US television channel, for $280 million (€208 million). The sale has generated a $56 million profit for Index Ventures, which bought a 20 percent stake in the business in 2006, according to media reports.

The news is a much-needed boost for European venture which is struggling to attract investors in the wake of the dot.com crash.

The website’s three founders – Martin Stiksel, Felix Miller and Richard Jones – are thought to have made $38 million each from the sale. Austrian Stiksel, 32 years-old, and German Miller, 30 years-old, founded Last.fm in 2002, and teamed up with Brit Jones, 24 years-old, in 2003.

Neil Rimer, founder of Index Ventures, told PEO: “The combination of music and social networking is a compelling model. It allows people to leverage each other’s knowledge of music.” Index declined to comment on the figures about the Last.fm sale in media reports.

Index’s previous deals in the social networking sector include a €5 million ($7 million) investment in social networking site Netlog. Founded in 1996 by four Rimer brothers, Index recently closed its fourth fund on €350 million despite uncertain fundraising prospects for most European VCs.

The firm has backed some of Europe’s most high profile venture deals – not least the $4.1 billion exit of internet telecoms company Skype to eBay in October 2005. The deal reportedly generated $300 million in profits for the Geneva-based firm.