So Maybe Consumer Web IPOs Won’t Come Back This Year After All

Yelp, like Facebook and Zynga before it, has taken a large late-stage funding round that includes measures to cash out employee shares, effectively negating internal pressure for a public offering to make early employees rich. As had been reported but not confirmed, Elevation Partners announced today it was buying $25 million worth of Yelp’s Series E preferred shares plus up to $75 million more from vested employees and other eligible shareholders.

San Francisco-based Yelp had been in widely publicized negotiations to be acquired by Google (s goog) in December, but they fell through. Clearly the local reviews company is now setting itself up to take the independent route. Yelp said in a release it had 26 million uniques in December, with its number of reviews doubling last year to top 9 million.

Yelp, which has put much effort into cultivating reviewers and negotiating its tricky relationships with local businesses, was to some extent left out of the recent hype cycle associated with creative uses of mobile location, social connections and reviews by companies like Foursquare and Gowalla. However Yelp recently introduced a mobile check-in function and now surfaces user visits in reviews.

The Elevation funding, which comes along with managing partner Marc Bodnick taking a seat on Yelp’s board, is to be used for growth in Canada and Western Europe as well as for mobile application development.

Yelp’s revenue was reportedly $30 million for 2009, which might not have been enough to excite the public markets. Elevation joins the Russian investor DST, which provided similar rounds for Facebook and Zynga, helping these startups find a middle ground between being acquired and going public. While many had hoped an IPO from a solid consumer Internet startup would liven up the stock market in 2010, Facebook has already declared itself out of the running.