Estimated Value $500 million

Last Year's Rank  Valuation NA

Business Streaming music online

Location Oakland, California

CEO Joe Kennedy

Investors Labrador Ventures, Selby Venture Partners, Walden Venture Capital, Peter Gotcher, Robert Kavner, Crosslink Capital, Hearst Interactive Media, Greylock Partners, GGV Capital, Allen & Company.

Analysis Pandora is kicking butt and owning Internet radio. The company struggled to build a business for years, but when the iPhone opened up to third party applications, Pandora started adding 35,000 users per day, double what it was doing before.

At the end of 2009, Pandora reported its first profitable quarter with $50 million in annual revenue. Most revenue generated comes mostly from ads with the rest from subscriptions and payments from iTunes and Amazon when people purchase music. Revenue is estimated to be in the $100 million range this year according to William Blair. If we apply a 5x multiple to sales, we get a valuation of $500 million. Shares in the secondary market on Sharespost trade at between an implied $500 - $700 million valuation.