Ebay’s Got A Hunch, For Around $80 Million

Breaking this morning: Ebay will announce the acquisition of New York based startup Hunch, say sources. The price tag will be somewhere around $80 million.

Hunch was founded by Chris Dixon, Caterina Fake (who left last summer to start a new company but remains an advisor), Tom Pinckney and Matt Gattis. The company has raised just under $20 million in funding.

The Hunch recommendation technology will be used by Ebay to revamp their own ecommerce recommendations. Dixon will take over Ebay’s existing 50 person recommendations team, and start a new office in New York.

That New York office will eventually grow to some 200 employees, I’m told, who’ll focus on recommendations. But the team will also analyze lots of Ebay data, and perhaps productize some of it or otherwise release it. As an example, Ebay purchase and sale data may help predict inflation or a looming recession better and sooner than any data the government can get their hands on.

It’s been a long journey for Hunch. The company was founded in 2008. In early 2010 I interviewed cofounder Fake, you can watch that here. In mid 2010 there were whispers that Google was taking a long look at the company as well, although I haven’t heard anything to suggest they were bidding against Ebay this time around.

Congrats to the team, and to investors General Catalyst Partners, Bessemer Venture Partners, SV Angel and Khosla Ventures.

42 thoughts on “Ebay’s Got A Hunch, For Around $80 Million

  1. Ben Lang says:

    Big news, congrats Hunch team!

  2. I have a hunch nobody ever meaningfully used hunch. No comment on traffic or utility of site? Looks more like a insider trading…. tax write off. Excellent exit. It’s who you know.

    • Dave says:

      Agree somewhat. Awesome/lucky exit for something that few people use. Maybe it’s the look-ahead value for what they might be able to do at eBay.

    • gubatron says:

      Completely agree, it makes absolutely no sense.

      Just because it’s a company founded by an internet star doesn’t mean it should be worth that much so quickly, specially when you have tried it for several months and it’s of no use whatsoever.

      I guess it’s a nice way to push/sell traffic down on people’s throats and that’s why it might be a money maker, but will people use it?

    • LocatorFinder says:

      Hey look the mylocator guy is back! Are you still pivoting?

  3. Arsenal says:

    eBay are trying to make big moves, along with launching an actual store in London

  4. F. Ierre says:

    Smells fishy. An 80M talent acquisition is a pricey payoff. Look for a strong (and corrupt) link between eBay’s board & Hunch investors…

    • a cynic says:

      Yeah, you probably have something there. Public companies are basically used to cash out regularly by management, I think of my friend who was a high enough officer of ____censored____ who described how management would juice the company for money annually.

      Long running corruption means someones back could be scratched years from now with a similar acquisition or bonus or whatever and its all “legal”. This is basically slow moving money laundering.

      • Jake says:

        I made the same exact comment on the article over at SAI.

        The VCs made some executives at eBay rich through acquisitions of earlier companies so its payback time.

        In this day and age of bootstrapped startups, its nice to know that VCs can still play their part. A failed VC backed startup can still get a pretty sweet exit. Kudos to the founders!

  5. M. Ideas says:

    Countdown to Dixon’s departure announcement…5…4…3…

    Seriously, why would ebay ever put someone so vocally anti-BigCorp in charge of 50 people? That’s guaranteed attrition of their best folks (assuming they have any). Crazy.

  6. TNHTC says:

    but the site looks only the nth social/local app

  7. I love how three years is considered a “long journey”. C’mon cdixon, you could have conceived, launched, financed, grown, and exited a company in half the time if you were really trying.

  8. ZA says:

    Chris sold the team (read: stacked with great engineers), not the product, to ebay. Hunch never scaled, which is too bad because it’s a great product. The founders are on to bigger and better.

  9. Didn’t they already try this with StumbleUpon? (http://investor.ebayinc.com/releaseDetail.cfm?ReleaseID=246467)

    eBay has all the data they could ever need, and they’ve got deep pockets to hire talented engineers. When faced with a build or buy scenario like this I just don’t understand why they wouldn’t attempt to build this recommendation intelligence in-house.

  10. John Best says:

    Congrats on building something worth 80m to Ebay in 3 years!

  11. Awesome! Congrats Chris, Caterina, and Team Hunch!

  12. At what valuation did they raise that $20M?

    It is an exit.

    But it’s a bunt, not a home run.

    • Toti Gold says:

      Smart… no one talk about the valuation, just about how much they raised.
      If they raised $20M it was probably on a $70M – $100M valuation (which means the last investors didn’t made any returns)…

      But the founders will celebrate another victory…

    • A lucky exit for the team and VCs, I don’t think the site has any traction, I used it 2 years ago and answered 100+ questions in couple days and did not see any benefit, Almost nobody I know talked about Hunch, I bet is that eBay will gain nothing from it and will be dissolved, @cdixon will be out in less than a year. #bubble

      • Mickey says:

        Well you and most likely about 10-20k people did the same and those answers coupled with some serious extrapolative math and predictive algorithms made for one valued ‘taste graph.’ So, congrats you actually contributed to them making 80 million. Ebay can throw all the math and talent at creating a predictive taste engine, but it takes the secret sauce of people inputing data and that is what Hunch has.

  13. Kim says:

    seems a lot like Google’s acquisition of Slide.

  14. “It’s been a long journey for Hunch. The company was founded in 2008.” 3 years to most companies is a short ramp…not a long journey!

  15. Ryan Shank says:

    I can’t see this being a “big win” for anyone except founders after raising $20 mil

  16. Andre Leb says:

    Can eBay generate $80 million plus using Hunch’s engine or engineering team (assuming they stay)?

    A small lift in traffic or sales from a new reccomendation engine could easily help pay for itself over a couple of years.

    Having said that I still feel like Milo was a much better buy (slightly cheaper too) addressing a larger need for ebay’s core business.

    Congrats to all involved and here’s to hoping for a better ebay shopping experience thanks to Hunch.

  17. “Long journey” since 2008!!! Come on people. That’s not a long journey even in Internet time. That said, eBay has wasted the opportunity it has with data (it’s own and external sources getting mashed up).

  18. DAR says:

    Long journey?!?!? Achieving a four-bagger in only 3 years sounds pretty speedy to me!

  19. Ron Fisher says:

    “It’s been a long journey for Hunch. The company was founded in 2008”.
    Less than 4 years, a long journey?? Come on.

  20. Anon says:

    Mike: Would you hold this up as an example of merit or of just being connected to the right people?

  21. Phil says:

    Hunch is a cool website, but if ebay is acquiring then I’m deleting my account and data.

  22. David says:

    These comments remind me of the old techcrunch circa 08. Facebook comments are terrible. Sure, it’s nice to to hold people accountable with real names, but it then begs the question of who is stupid enough to comment with your real name? Read a TC comment stream now, it’s akin to youtube or Yahoo. Horrible.

  23. Ariyas says:

    Congrats to the seller. Pretty nice sale. Prime Visibility was sold by Andrew Hazen for $36 million cash. Buyer was Blinkx Plc

  24. The Hook says:

    Clever, inventive title! Cool post, as well.

  25. Halley Burmaster says:

    Next time you’re on eBay, take a look at how many PowerSellers there are: you’ll find quite a few. Now consider that every single one of one of them must be making at least $1,000 per month, as that’s eBay’s requirement for becoming a PowerSeller. Silver PowerSellers make at least $3,000 each month, while Gold PowerSellers make more than $10,000, and the Platinum level is $25,000. The top ranking is Titanium PowerSeller, and to qualify you must make at least $150,000 in sales every month!*

    Remember to browse our very own blog site

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