A well-known fact about Silicon Valley is that the vast majority of technology startups fail. Rich Barton never got the memo.
Barton, who started Expedia in 1994 and co-founded Zillow in 2005, helping both reach multibillion dollar stock-market valuations, is one step closer to getting his third company — Glassdoor — there as well.
Glassdoor, a website for employer reviews and job listings, said today that it raised $50 million in a financing round led by Tiger Global Management, the New York-based investment firm that’s been pouring money into Silicon Valley. Lee Fixel, a partner at Tiger Global, is joining the board.
The financing values Glassdoor at close to $500 million, according to people with knowledge of the deal who asked not to be identified because the valuation wasn’t disclosed. Odds of an entrepreneur reaching that mark even once are slim, according to Shikhar Ghosh, a senior lecturer at Harvard Business School, who said that in 70 percent to 80 percent of startups, investors fail to see the projected return on their investment.
Barton, 46, helped build Expedia from a small unit within Microsoft into the world’s largest online travel agency — now surpassed by Priceline.com — and Zillow into the top web service connecting real estate agents with consumers. In 2007, he co-founded Glassdoor with Chief Executive Officer Robert Hohman to help job seekers discover how much companies pay employees for particular roles and how employees view opportunities for career advancement.
In all three cases, the focus was giving “power to the people” to make easier, smarter decisions, Barton said. “It’s about empowering the regular guy with information, data, analysis and tools.”
Glassdoor, based in Sausalito, California, has more than 22 million members with data on about 300,000 businesses. Job hunters use the site to research potential employers by sifting through anonymous reviews left by workers.
For example, a candidate for a job at Google would see that employees give the company 4.1 out of 5 stars and 95 percent of respondents approve of CEO Larry Page. Software engineers make on average $145,190 a year, including salary and bonus, compared with $162,393 at Facebook, according to those who filled out reviews.
“The types of candidates we send to employers are highly qualified and highly educated on the employer because of what they’ve read on Glassdoor and the research they’ve done,” Hohman said.
Facebook and Wal-Mart are among 1,400 companies paying to customize their profile page, monitor their reputation and recruit talent. Glassdoor’s revenue has climbed 150 percent in each of the past three years, though Hohman declined to provide sales figures. The company has about 200 employees and, having raised a total of $93 million, will add 100 next year, Hohman said.
Barton, Glassdoor’s chairman, is based in Seattle, where he’s also chairman of Zillow. He attributes much of his success to Hohman at Glassdoor and Spencer Rascoff, CEO of Zillow.
“Ideas in the startup world are pretty cheap and execution is quite dear,” Barton said.
Employees seem to agree. Hohman has a 98 percent approval rating among reviews on Glassdoor, just behind Rascoff at 99 percent.