12 Comments

Summary:

Twilio, a web-based VoIP development platform, is going to get a boost, thanks to one of its investors: Dave McClure and his fund, 500 Startups. Twilio, a San Franciso-based startup, allows web-app developers to add voice-related functionality to their web apps.

500Twilio

Twilio, a web-based VoIP development platform is going to get a boost, thanks to one of its investors: Dave McClure and his fund, 500 Startups. Twilio, a San Francisco-based startup, allows web-app developers to add voice-related functionality to their web apps. 500 Startups is going to invest in many of these developers and has earmarked a quarter-million dollars for what it’s calling a Twilio Micro Fund. McLure told me that he’s seen a lot of startups use the Twilio platform. The new fund will invest up to $10,000 in up to 10 companies and will get about 1 percent equity in exchange. Some of these companies may get up to $50,000, and will be asked to work out of 500 Startups’ incubator space in Mountain View, Calif.

By investing in these startups, McClure is doing two things: getting access to very early stage companies and at the same time, looking to prop up the value of his Twilio investment. In order to succeed, Twilio has to keep growing as an ecosystem. More apps that use its platform means higher total voice minutes for the Twilio platform, and charging for voice is the key way for Twilio to make money. McClure told us he’s taking the lessons he learned running the FB Fund (a small fund that invested in Facebook-platform focused startups) and applying them to some of his portfolio companies. He’s considering a small micro-fund focused on the CrowdFlower platform as well.

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  1. Announcing Twilio Fund for 500 Startups | 500 Startups Blog Thursday, September 23, 2010

    [...] Today we’re excited to announce Twilio Fund, a $250,000 micro-fund for investments in startups that are powered by Twilio’s APIs for phone calls and text messages. Via Twilio Fund, we’ll offer investments of $10,000 in up to 10 companies for a 1% stake in the company. In addition, one or more of these companies may be selected for a $50,000 investment and invitation to participate in our soon-to-be announced accelerator program at the 500 Startups space in Mountain View, CA. (You can also read about this announcement here) [...]

  2. Adding a couple links for reference:

    Announcing Twilio Fund for 500 Startups
    Twilio Fund Application Page

    Full Disclosure: I work at Twilio

  3. Didn’t TWILIO release some numbers recently that indicated they had 20-30,000 Developers working with their APIs? It was some phenomenal number for a small venture.

    Out of those, there aren’t 10 worthy projects?

    Aren’t Developers who are interested and hip to this platform already there? Makes you wonder why they need to run this like a Cattle Call? Maybe for the PR of it all? Or, to keep people from migrating to competitive platforms?

    I sure with these kind of questions were asked when a Post was being written. Some logical questioning rather than re-hashing of a press release. Please?

    1. um…yes, there are plenty of interesting apps on Twilio already.

      that’s why we put this together.

      not sure i get your point?

      1. @dave Sorry, thought my questions were pretty clear?

        I’ll try again…

        I presume any Developer working with Twilio APIs today is ahead of the curve. So, of the 20-30,000 current projects, why aren’t you sifting through and investing in 10 of them directly, rather than doing the Cattle Call?

        It just seems counter-intuitive.

        If you’d announced funding of 10 Developers currently working with Twilio, you’d likely have attracted even more new talent coming to the platform. It would have been “more real.” But, if there aren’t 10 viable candidates already there, will there ever be? I guess that’s what I was wondering.

        It just seems an unusual route you’ve taken. But, hey, that’s what makes the World an interesting place. Hope it works out.

      2. @Bob Roberts: ok, sorry now I understand. we *HAVE* already invested in several startups using Twilio for their solution (Mogotix, TeachStreet, HomeBoodle, others). in fact, as Om mentioned it was when we started seeing these startups use Twilio that we thought about coming up with the micro fund idea.

        does that answer the question?

    2. Astute observation. I’ll go with the PR ploy.

      1. There are MUCH easier platforms to develop. It is just an asterisk with AGI wrapper. Lot of vox’s have done it – Cloudvox which is now ifbyphone, invox with their drag and drop designer to build apps in just few steps and of course Voxeo – the real guerilla in this market.

  4. Another great app market, is Broadsoft’s App Marketplace…for those interested in developing on a platform already integrated into large global carriers.

  5. Yeap, as @sam mentioned it, lots of other guys have done, even we have :). So actually, it would have been much better if the fund was announced for Cloud telephony based apps, rather than just twilio apps.Just sounds too PRish.
    Because whatever you can develop in Twilio you can just as well develop in all other Telephony API platforms and just as easily.

  6. Development Hell Monday, October 18, 2010

    OK, this is an old post, but, relevant today. . .

    What happens when a (high profile) VC/Angel sets up a fund for developers specific to one company they already invest in. . .THEN, they “pass on a submission?”

    That Developer is dead in the water. It’s actually done them a a disservice by creating a fund of this nature, since it means an all/nothing for the Developers working with it. It creates a one-shot scenario.

    Anyone working with TWILIO could port their code to competitive platforms (VOXEO et al). But, they could not stick with TWILIO if @Dave “passes” on them.

    Proverbial double-edged sword. Surprised no one brought this up yet. But, I’m watching a Developer die (figuratively) right now because of this.

    It’s a crap deal for Developers working with the platform, since it creates a Company Store mentality and limits their prospects.

  7. Cloud Communication Platform Twilio Raises $12M: Tech News « Tuesday, November 9, 2010

    [...] include Union Square Ventures, angel investors and Dave McClure’s 500 Startups, which established a dedicated $250,000 Twilio micro fund in September. Twilio, which will use the money to expand, announced Ty Wang, former senior director [...]

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