Where Einstein Meets Edison

iPhone, iPad, iFund!

iPhone, iPad, iFund!

Mar 30, 2011

Steve Jobs unveiled the new iPad 2 on March 10, 2011. On March 11, there were endless lines of customers waiting outside Apple stores across the US with their credit cards ready.  Apple is re-defining computing with its unique devices and App store. With over 350,000 iPhone apps and over 65,000 apps for the iPad, the App store has fast become an unparalleled release medium for mobile software developers.

And none other than the legendary Kleiner Perkins Caulfield & Byers (KPCB) group was able to see this long before the first iPad was ever launched. The iFund, an investment fund started by KPCB to help build game-changing iPhone and iPad apps companies, was launched 3 years ago. In 2 years time, iFund needed a fresh infusion of funds in the form of iFund 2. Since then, the KCPB group has invested in companies like Shazam and Zynga mobile and inMobi. To learn more about this exciting investment fund, MITER interviewed Matt Murphy, partner at KPCB, to discuss their past and present mission.

Can you tell us about the history of the fund?

The fund started about 3 years ago, six months before the iPhone was launched. Prior to iPhone, KPCB had been investors in mobile and mobile app/white label firms. We are just chopping at the bit, waiting until mobile becomes like the web, where any great developer can deliver a great service to any consumer, and consumers have an abundance of choices, without gatekeepers.

We were confident that the iPhone was going to be the first domino that moved in that direction, and besides that, we placed a big bet on the iOS ecosystem. I don’t think we had any idea that the volume of iPhones sold would be as big as it has become or the industries around them would move quickly as they have.  The number of developers that have created applications and made money and created businesses – to go from zero to a multi-billion $ plus ecosystem in a couple of years is pretty impressive by any measure.

iFund invested in 14 companies in its first phase. Which companies have been the most successful?

Ng:moco was acquired for $400M, which is a pretty good measure of success. We got many companies that are doing well. We got the leading global mobile music service in Shazam, leading texting services in Pinger, GOGII with textplus, leading game companies in Ng:moco, Zynga and Booyah. I can go down the list but I can say that what’s been most impressive is the progress most companies have made in this space, as the platform monetization kicks in. Another one like Shopkick is still early but extremely promising to kind of match up physical retail, mobile and change consumer behavior around shopping. There are a lot of companies out there that we are pretty excited about.

You exhausted this fund in Mar 2010. In the second round of capital infusion, how many companies have been funded?

We haven’t really publicly disclosed that as we have some companies still in stealth mode, but I’d say more than a few.

Do you think that there will be more capital infusion in the fund?

Sure, when this is exhausted, I think we will continue to push money into the fund. I don’t think we or anybody else think this mobile thing is a flash in the pan, so believe me, we will be very committed and aggressive in the mobile space for quite sometime to come. In terms of new investments, you have heard of Flipboard, Callaway Digital Arts that are more iPad centric and there are a few more that we haven’t yet announced.

Is the fund leaning more towards iPad?

With the launch of the iPad, we have been looking for things that take advantage of that use case, form factor, etc. I won’t say that it’s skewing towards the IPad vs the iPhone. I think we are looking for the best set of opportunities in both of those, and post the launch of the iPad, we have been spending a lot of time looking for different use cases in health care, enterprise, in education for the iPad. We think there are a lot of opportunities there.

Where do you think online education/mobile education is going?

A lot of online education right now is on a fixed pc – that’s not a very portable experience. The beauty of the iPhone and the iPad is that you can get a lot of functionality where ever you are. I think you will see a lot of things that are tailored for the iPad or the iPhone, that are an extension of some of the things that have already happened with respect to online education, online training, with kids learning how to take standardized tests and things like that. I think there is a huge opportunity out there to do these things, but in a more consumable way on these new set of devices.