Kleiner Perkins Caufield & Byers were ridiculed for pouring $10 million into iPhone game maker ngmoco as part of their iFund program. Then DeNA Co. purchased ngmoco for $400 million, turning Kleiner’s $10 million into $100 million within three years. The iFund was founded to fuel innovation and development of profitable entertainment software for Apple Inc.‘s (NASDAQ: AAPL) iPhone, iPod Touch, and most recently the iPad and the initial $200 million poured into the investment fund is now turning into quite a bit more for the venture capitalist company that manages it. With more than twenty businesses in the mobile space receiving capital from Kleiner’s iFund, investors are patiently waiting to see which of the stable will be the next ngmoco. Now investors should start looking to companies in the social networking field as Kleiner launches a new fund to invest in social start-ups.
Funding is coming from a variety of sources. Amazon.com Inc. (NASDAQ: AMZN), Liberty Capital (NASDAQ: LCAPA), Comcast (NASDAQ: CMSCA), and boutique investment bank Allen & Co. are all “strategic partners” with Kleiner in the new fund. The surprise partners in the new fund are the social networking superpowers Facebook and Zynga games, whose symbiotic relationship through the runaway hit FarmVille has made both companies objects of great interest to investors.
The fund’s first company in what is expected to be a rapidly expanding portfolio is CafeBots. Described as a “friend relationship management” company, CafeBots has received $5 million from Kleiner’s new Facebook and Zynga-fueled fund. The question on investors’ minds now should be how this new fund represents a dynamic shift in the growing mobile app market. Where companies like Zynga have begun blurring the lines between a social media business and a mobile game business, the new fund shows the separate markets diversifying and finding their own identity. Recent investments, like Intel (NASDAQ: INTC) and The9‘s (NASDAQ: NCTY) allotment of $8 million to online gaming network Aurora Feint is also indicative of the types of start-ups that the new Kleiner fund will likely look to invest their resources.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
