A few days ago, the news broke that Yahoo!, the search engine which has largely rebranded itself as a media company, has bought Tumblr, the popular blogging platform. Yahoo! spent a whopping $1.1 billion on its newest acquisition, a sum which has made Tumblr’s founder and senior employees very, very wealthy.
David Karp, a high school dropout and the founder of Tumblr, is said to be worth $253 million following the successful sale of his company. The investors who initially helped Tumblr get off the ground are also seeing a healthy return on their investment. Two firms, Union Square Investors and Spark Capital invested around 5 and a half million dollars into Tumblr over the course of the last six years, and they’ll now be splitting $750 million in profits as a result of the sale.
It’s too early to say whether or not Yahoo!’s bid to be a big player in the social space will work out in the company’s favor. For Tumblr’s employees though, there can be nothing but optimism. On average, each employee will see $371,000 in additional payment following Tumblr’s sale.
All this money bodes well for these employees on a personal level, but it may also be a real boon for the NYC start up scene in general. While Silicon Valley is still the undisputed headquarters of all things tech, Tumblr is the first significant tech acquisition that was founded and grown in NYC. With so many core Tumblr employees now flush with funds and able to jump ship and start their own projects, Yahoo! buying Tumblr may be a real shot in the arm for both investment and innovation in the NYC tech scene.