Kleiner Perkins Announces Social Media Fund
CNBC Media and Entertainment Reporter
Venture Capital firm Kleiner Perkins Caufield & Byers just unveiled an unprecedented sort of fund to invest in social web entrepreneurs.
The $250 million "sFund" is a big bet on the potential of "social," and it has amassed a remarkable list of companies committed to invest in the fund and act as strategic partners: Amazon , Facebook, Zynga, Comcast, Liberty Media and Allen & Co. Legendary venture capitalist John Doerr made the announcement on a stage at Facebook headquarters with Mark Zuckerberg, Jeff Bezos, Zynga CEO Marc Pincus and KPCB partner Bing Gordon, who will be leading the fund.
Why is Amazon there? Because of Amazon Web Services, a cloud computing platform with variable pricing for startups. Bezos says the top three companies that develop for Facebook use Amazon Web Services because it's so easy to scale. And Amazon will provide sFund companies AWS "Getting-Started Support" for one year, plus dedicated business and technical support.
Along with Amazon, other companies will also provide more than just investment: Facebook will give access to its platform teams and now programs like Facebook Credits. Zynga will meet with sFund companies to focus on "management and technical development." Comcast Interactive Capital, the cable giant's venture fund, will provide access to Comcast's relationships.
Bing Gordon says this sFund environment will help create great CEOs faster. And this will all happen in an environment that's tailored specifically to social—as Zuckerberg says allowing any website or device "to be designed to be social from the ground up."
Facebook is in its 7th year and there have been investments in hundreds of social startups. Why wait so long, and is it too late? The panel didn't really answer this question. But the fact that the fund is starting now does speak to the confidence that this space will continue to grow.
KPCB is *not* an investor in Facebook, though it is a backer of Zynga, and sources tell me, very involved in Zynga's management. Still, this fund is a somewhat familiar strategy for KPCB — Back in 2008 Kleiner Perkins announced a $100 million "iFund" to invest in iPhone applications. This March they added another $200 million to the iFund.
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