October 22, 2010
Tech Heavyweights Team Up For Social Media Startup Fund
Facebook, Amazon and online computer gaming firm Zynga have partnered with prominent Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers (KPCB) to establish a $250 million fund to invest in social media startup companies.
The "sFund", which includes other investors and strategic partners such as Comcast, Liberty Media and boutique investment bank Allen & Co., will be led by former Electronic Arts CEO Bing Gordon, who also sits on the boards of Amazon and Zynga.The fund will provide financing, counsel and capital for entrepreneurs developing new social applications and online services in the fast growing social Internet market.
Facebook CEO Mark Zuckerberg said there is an unprecedented opportunity to invest in the social-media transformation of industries such as music, e-commerce and others seeking to build social Web applications to harness the networking phenomenon.
"There's going to be an opportunity over the next five years or so to pick any industry and rethink it," he told reports at his company's Palo Alto, Calif.-based headquarters.
"We're at the beginning of a new era for social Internet innovators who are re-imagining and re-inventing a Web of people and places, looking beyond documents and websites," said KPCB partner John Doerr in a statement announcing the new initiative.
"There's never been a better time than now to start a new social venture."
"The Web is being rebuilt around people, and we're at a point where any app, website, or device can be designed to be social from the ground up," said Facebook founder Mark Zuckerberg.
"We're focused on enabling entrepreneurs to build companies that can disrupt their industries."
In addition to cash, the fund's partners bring additional resources to the table. For instance, Amazon said it would provide some entrepreneurs with the use of computing and data storage services, along with priority access to startup events throughout the world.
For its part, Facebook pledged access to programs and platform teams, while Zynga said it would provide the nascent startups with management and technical development assistance.
"Zynga's successes such as 'Farmville' and 'Mafia Wars' show the speed with which entrepreneurs can transform existing industries and invent entirely new ones through social platforms," said Zynga founder Mark Pincus.
"Our model demonstrates consumers' desires to connect with others in new and valuable ways."
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