Zynga will be valued at about $7 billion based on 699.3 million shares understanding. This would put Zynga’s valuation at close to Electronic Arts, which is hovering at about $7.65-$7.8 billion. Zynga makes money from selling virtual goods on social games such as FarmVille, CityVille, and Words With Friends. Zynga has about 230 million monthly active users and they have a close-knit relationship with Facebook. Some financial analysts believe that Zynga is rushing their IPO before tech stocks take a major plunge.

Zynga was founded in 2007 in San Francisco by Mark Pincus. Pincus named the company after his dog Zinga. Zynga recorded a profit of $27.9 million on revenues of $597.5 million in 2010. In the first 9 months of 2011, Zynga hit revenues of $828.9 million. Even though Zynga’s revenues are growing, their number of daily active users has fallen two quarters in a row. Zynga currently has 2,500 employees.

The proceeds from the IPO will go towards working capital. About $83.6 million will be spent to satisfy tax withholding obligations that is related to stock of current and former employees. They also plan to use a portion of the proceeds for charitable causes through Zynga.org. In the sale, Zynga will have three classes of shares: Class A, Class B, and Class C. Pincus owns Class B shares and all of the company’s Class C shares. After the IPO, Pincus will control 36.2% of the company voting power. Pincus will not be selling any of his shares in the IPO. No other executives plan on selling stock either.

Some of Zynga’s venture capital investors will be selling their stock, including Institutional Venture Partners, Union Square, Foundry, and Avalon. Google will be selling 1.7 million shares. Kleiner Perkins will not be selling any of their stock.

[AllThingsD]

[BusinessInsider]

Sugar Inc. Closes Investment from Institutional Venture Partners and Sequoia Capital

San Francisco, CA, April 13, 2011–Sugar Inc., a fast-growing global media company for women, announced today that it has completed a $15 million later-stage round of financing led by Institutional Venture Partners (IVP), one of the premier later-stage venture capital and growth equity firms. The Company’s original and consistent partner Sequoia Capital also participated in the round.

Sugar intends to use the funds for brand extensions, acquisitions, and international growth in pursuit of its goal of becoming the world’s largest media company focusing exclusively on women’s lifestyle. This round brings Sugar’s total funding to $46 million.

Sugar is the online leader in original content, social media, and commerce targeting trendsetting women, with a global audience of more than 20 million. The company has two business segments focusing on original content and commerce with a portfolio of brands including PopSugar.com, ShopStyle.com, PopSugarCity.com, and Fashionologie.com. Sugar has 190 employees and operations in the U.S., Europe, Japan, and Australia.

“On the eve of our five-year anniversary, Lisa and I are proud of the success and rapid growth we have demonstrated to date,” said Brian Sugar, founder and CEO of Sugar. “In the last year we achieved significant milestones, including growing our audience to over 20 million unique visitors per month, driving over $250 million in commerce to our partners, and reaching profitability for the full year. We are excited with the opportunities ahead of us as we continue to pioneer the combination of content and commerce.”

“Sugar is led by an outstanding management team that has driven impressive growth in a diverse set of complementary revenue streams,” said Dennis Phelps, General Partner of IVP. “We see an enormous market opportunity and are excited about Sugar’s ability to execute in a world of slower-moving incumbents.”

“Brian and Lisa Sugar are entertaining a new generation of women. They do so around the clock and on hundreds of millions of mobile and web devices. But Sugar Inc. is still at the beginning of what is possible,” said Michael Moritz, General Partner of Sequoia.

[AllThingsD]

LivingSocial also launched a new service called Escapes, which is intended for travel deals. LivingSocial has sold 200,000 hotel nights thus far.

[New York Times]

HomeAway is a website where you can rent houses, apartments, condos, etc. for vacations on a nightly or weekly basis. HomeAway currently has about 540,000 rental listings across 120 countries. Homeowners pay an annual fee of about $300 to post their properties.

[BusinessWeek]

Yext was founded in 2006 and they have partnered with publishers by installing Yext Numbers. Yext Numbers is a local search monetization platform. Yext partners include YellowPages, Topix, and Local.com. Yext uses IBM’s speech-to-text recognition to keep track of calls for billing. Yext is led by Howard Lerman and Brian Distelburger. Distelburger was the COO of CDS and Lerman was the COO of Datran Media.

“We are confident that Yext will become a leader in local web-based advertising,” stated IVP General Partner Dennis Phelps. “Howard, Brian and Brent’s company has the potential to solve this huge problem by focusing on advertisers as users.” Phelps is now a board member at Yext.

Spark Capital and IVP are previous investors in Twitter. In Twitter’s last round of funding, their valuation was $255 million. At an additional $100 million round of funding, the company is expected to be valuated beyond $1 billion. Despite the valuation Twitter has, the company does not have any substantial revenue model. But as we have learned from YouTube’s acquisition, that really doesn’t matter. YouTube was burning through VC funding before Google bought them out.

How many users does Twitter have? The company expects to have 25 million users by the end of this year. Twitter rival Facebook.com has about 300 million users. At one point Facebook made an offer to buy out Twitter for $500 million, $100 million in cash and $400 million in stock options. Rather than buying out Twitter, Facebook bought out FriendFeed.