If last year saw the venture capital community chasing startups building around the Facebook platform, this year the new new thing are iPhone application makers. In addition to the $100 million iFund floated by Kleiner Perkins Caufield & Byers, other VCs are getting in on the action.
We recently covered Pelagao, which raised $15 Million from iFund, Reliance Communications and T-Mobile’s Venture Fund. Union Square Ventures and First Round Capital recently invested an undisclosed amount in New York City-based Pinch Media. Add a relatively unknown company, Tapulous, to this growing list that is beginning to get a lot of attention.
My sources are telling me that this company has closed funding from investors like Salesforce.com Co-founder Marc Benioff and Jeff Clavier. The company is said to have been valued at around $8 million. Apparently, it was tentatively called GoGoApps, but changed its name recently. What makes this company so special?
First it was started by Mike Lee, a well-regarded Mac programmer who worked on the popular software Delicious Library as part of a company called Delicious Monster. The company’s other co-founder is Bart Decrem, who also founded Flock, a company that makes a browser for optimized social apps. He left the browser maker in September 2006 but has recently re-emerged.
Decrem told Michael Arrington that he was in the process of raising money and his company was making social apps for the iPhone, and they will be launching it over the next couple of weeks. In a story last week, Ars Technica’s Jacqui Cheng pointed out that the company had hired some serious programming talent to work on a “whole family of apps,” including “Twinkle (a Twitter client) and Collage (a realtime collaborative art/photo sharing app).” In the Ars story Lee said, “The focus is on small, beautiful apps, with a focus on bringing people together.” From why I have learned, they have built over 30 apps.
Tapulous isn’t the only one looking for funding. There are quite a few early-stage iPhone app makers that are knocking on the VC doors. One VC joked about seeing half a dozen Loopt-like startups out there. There are several shiny objects on the market with no users, making it hard to fund these companies. Some investors are taking a watch-and-see approach to the sector, mostly because investing in iPhone/iTouch apps will be about market share momentum.
That is a good approach to take. As Simon Brocklehurst pointed out in his analysis earlier this year, the success of investments in device-specific app makers is predicated on the platforms being hugely successful, and selling in large numbers — like 100 million iPhones over the next five years. That still shouldn’t prevent a frenzy resembling the Facebook madness we saw last year.