Kleiner Perkins and Partners Create $250 Million ‘Social’ Fund

By MIGUEL HELFT via nytimes.com

Hoping to capitalize on the popularity of social networking, the well-known venture capital firm Kleiner Perkins Caufield & Byers is teaming up with heavyweights of the social Web to create a $250 million fund to invest in social start-ups.

The “sFund” was announced by John Doerr, a Kleiner veteran, on Thursday at a star-studded press conference at Facebook headquarters in Palo Alto, Calif. The fund includes investments from Amazon, Facebook, the Zynga Gaming Network, Comcast, Liberty Media and Allen & Company, as well as Kleiner and some unnamed individuals. The chief executives of Amazon, Facebook and Zynga — Jeff Bezos, Mark Zuckerberg and Mark Pincus — all spoke at the event. They declined to say how much each party put into the fund.

In an interview, Mr. Doerr said applications and infrastructure to support social experiences on the Web would continue to grow rapidly.

“We are in a new applications economy that was pioneered by Steve Jobs,” he said. “Offering these apps, these services, together on great big social platforms is the next big thing.”

Well, it may already be a big thing.

Kleiner is creating the sFund at a time when investing in social is hardly new. Several prominent venture capital firms like Accel Partners, Greylock Partners, Spark Capital, Union Square Ventures and others, have been heavy investors in social start-ups. And several companies, like the game makers Playfish and Playdom, have already been sold for hundreds of millions of dollars.

Kleiner’s own record in social networking has been mixed. The firm, for example, was an early investor in Friendster, the pioneering social network that saw itself overtaken by MySpace and Facebook and whose demise was chronicled in great detail. Kleiner also has invested in Zynga, which is by many measures the most successful social start-up after Facebook. And it reportedly netted $100 million recently when mobile gaming company Ngmoco was bought by Japan’s DeNA for $400 million.

Mr. Doerr said that the sFund would make investments ranging from $100,000 to $100 million. The sFund has already backed one company, Cafebots, which remains in stealth mode.


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