Gilt Founder Ryan: 'No Chance' of Tech Bubble
Kevin Ryan spoke to FOX Business about his investments in media, data, and e-commerce and the recent surge of activity in the startup tech sector. Ryan is a founder of Business Insider, MongoDB and Gilt Groupe, three of New York's biggest startups.
Ryan said when he sees a “new product that could be created that helps to change a sector,” he goes after the opportunity, regardless of his past industry experience. Ryan previously built DoubleClick, an online advertising service which was eventually sold to Google (NASDAQ:GOOG) for $3.1 billion.
Business Insider, originally Silicon Alley Insider, launched in 2007 as a site that focuses on business and technology news. It has evolved into a widely-read news site, even outpacing traffic for established rivals.
Ryan feels that Business Insider has succeeded because it is a digital-first brand. “The focus on online means you’re better at it. You’re not thinking about your magazine, you’re not thinking about your TV station.”
FOX Business was the first to report that AOL (NYSE:AOL) had acquisition conversations with Business Insider, for a number greater than $100 million. Instead of selling, the Business Insider team has decided to continue to build the brand, in hopes of an even greater valuation.
In e-commerce, Ryan has had success with Gilt Groupe. An early leader in “flash sales,” Gilt sells high-end fashion to members at heavily discounted prices.
Gilt, which was founded in 2007, has long considered the prospects of going public, but would be open to the right acquisition opportunity. A company like Amazon.com (NASDAQ:AMZN), American Express (NYSE:AXP) or China's Alibaba could potentially buy Gilt, though they have not held discussions.
Gilt is profitable and has raised $221 million in venture capital at a $1.1 billion valuation. Investors include Matrix Partners, Goldman Sachs (NYSE:GS) and Draper Fisher Jurvetson.
Ryan said Gilt has grown, in part because it is the “most successful sector.” Pointing to companies like Zulily (NYSE:ZU) and China’s Vipshop (NYSE:VIPS) , Ryan said “a good sector is one where there are multiple companies that are worth hundreds of millions or billions of dollars that are all growing.”
As for MongoDB, Ryan said the database startup is “going to be one of the seminal companies New York.” Ryan said employees of MongoDB will ultimately create an industry for similar startups, predicting that it could “probably spawn twenty other companies” in the region.
MongoDB has raised $231 million in venture capital at a $1.2 billion valuation. Sequoia Capital, Union Square Ventures and Salesforce (NYSE:CRM) have invested in the company.
Ryan’s latest project is Zola, a site for wedding registries. The company aims to offer “modern online offerings” including travel and outdoor activities.
Although most of Ryan’s startups have sky-high valuations, he said “there’s no chance” technology is in a bubble.
“There will be some companies that will go down, that will lose 40% of their valuation,” but we are not seeing overvaluation to the extent of the dot com crash in 1999.