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Kleiner's $100 million iFund means more money for mobile application startups

Financial trends and news by John Shinal
March 7, 2008 | last edited July 10, 2008 | Comments
Short URL: http://vator.tv/n/173

Startups developing mobile applications got two pieces of good news this week. First, Apple did what many iPhone watchers have long expected when it said it was rolling out a software developer kit for the device. Opening up the iPhone software to third-party developers will likely result in an explosion of new applications -- and give independent developers the chance to get their apps on the fastest-selling handset in the mobile market.

The second piece of good news came from Kleiner Perkins, the legendary Silicon Valley venture capital firm, which unveiled a $100 million fund targeted at startups developing iPhone applications.

That's serious money from a serious player, and is likely to spur the creation of a host of new mobile application startups.

Venture capitalists are looking to invest in mobile startups that can build a user base for their applications virally via the Web, rather than relying on the traditional method of working with wireless carriers to get on their platforms, or decks, as we first reported back in September,

The older business model, which put startups at the mercy of the big wireless providers and required lots of up front development costs with no guarantee that the resulting application would find a home, is quickly becoming extinct.

The last time we spoke with Scott Raney of Redpoint Ventures, he was stoked about mig33, which is building a mobile social network on the back of services like Internet-based calling, instant messaging and photo sharing. The startup, which is backed by Redpoint, Accel Partners and DCM, has garnered millions of users in more than 200 countries in just over two years.

We've been watching several interesting mobile application startups here on Vator.tv, including NearbyNow, which CEO Scott Dunlap calls "Google for shopping malls." The application allows users to find products and services at specific shopping malls while they're out shopping or before they leave home.

You can see their pitch embedded in this post, and see an interview we did with Dunlap here.  

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