Friendster Recapitalized

Embattled social networking site Friendster, with an impressive group of investors that includes Kleiner Perkins Caufield & Byers, BenchMark Capital and Battery Ventures, has not been able to keep up with competitors. Even so, not many companies can claim to have John Doerr, Bob Kagle, Jeffrey Katz, Tim Koogle and Roger Lee on their board.

It is a poorly kept secret that Friendster has been searching for an aquiror for some time, although obviously no one has yet stepped up the the altar.

The rumor floating around over the last week, which I’ve heard from multiple sources close to Kleiner Perkins, is that the fund has stepped in to stop a shutdown. They have injected limited additional funds (I’ve heard numbers between $5 million and $12 million) and have restructured the capitalization of the company to heavily favor their fund (this would be customary in a recapitalization). No reports as to whether BenchMark or Battery were also involved, or whether the current executive team will be looking for new jobs.

Update: More rumors, that the round was done at a $3m pre-money valuation. This is not a healthy company.