We hear that Thumbplay, the NY-based ringtone startup that's been growing at a supercharged rate, has hired Morgan Stanley to quietly shop itself around.We gather this is more of a market-testing exercise than a full-blown sales pitch; apparently Thumbplay's investors (Bain Capital Ventures, SoftBank Capital, i-Hatch Ventures, Redwood Partners, New Enterprise Associates and Meritech) are more interested in raising some additional capital and eventually taking the company public.
But if Thumbplay did want to put itself on the block, it might be able to get a substantial price: We hear that the company is doing more than $100 million/year in sales, and that a conservative multiple would be 2x - 3x and an optimistic one might be as high as 5x. The latter would make the two-year-old company worth more than $500 million.
One potential hitch: Some data we've seen suggests that the ringtone market is flattening. Perhaps this is why Thumbplay is eager to move into other markets such as full-blown music sales.