Meta Engages in Unconventional Partial Acquisition of AI Startup Scale
Meta Platforms, Inc. has entered into a distinctive financial agreement to acquire a 49% stake in the AI technology firm Scale.
Valuation and Liquidity for Shareholders
Scale has officially announced that the terms of this deal assign the company a valuation exceeding $29 billion. According to their statement, the company intends to “distribute” proceeds to its shareholders and equity holders, commonly referred to as employees. This move is designed to provide these stakeholders with "substantial liquidity" while simultaneously allowing them to retain their holdings in the company.
Hiring of Scale’s Visionary Founder
In a related development, Meta has secured the employment of Alexandr Wang, the highly regarded CEO and founder of Scale. Wang famously left the Massachusetts Institute of Technology at the age of 19 to pursue the founding of Scale, a company that specializes in delivering AI training data verified by human input.
Clarifying the Structure of the Deal
Contrary to initial interpretations that suggested Meta planned to purchase shares directly from existing shareholders, industry sources informed Bloomberg that this is not the case. Instead, the transaction facilitates dividend distributions to investors. For example, Accel, a prominent early investor in Scale, is projected to receive a payout of approximately $2.5 billion, as noted by Bloomberg. Accel has chosen not to comment on this development.
A Diverse Investor Pool
Scale boasts a diverse array of investors, including notable names such as Amazon and Meta itself. The company was most recently valued at $14 billion following a $1 billion Series F funding round conducted a year ago. Given the magnitude of the upcoming dividend payouts, some market observers are likening this arrangement to a full acquisition of the company. The outcome of this unique transaction may prompt scrutiny from regulators as it unfolds.
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