We’ve all heard of t he the so-called PayPal Mafia, the group of entrepreneurs and angel investors who were founders or early employees of online payment service PayPal. They included Peter Thiel, Reid Hoffman, Max Levchin, Keith Rabois and Elon Musk. All of them went on to found their own tech companies, as well as fuel the next generation of startups.
But PayPal was bought by eBay almost 15 years ago, all the way back in 2002. That is a very long time, especially in the tech world, where things most very quickly. Maybe it’s time to identify a new “mafia,” a group that is launching the current generation of startups and entrepreneurs.
There are a few options. Facebook seems like a good one, as many of their early staff has gone on to found their own companies. Google might also work. According to CB Insights, though, the next generation is being actually being fueled by Twitter.
The venture capital database has identified a total of 15 companies, which “have been co-founded by employees that worked at Twitter prior to their IPO and which have gone onto raise funding.”
The most successful of these, and the one you are probably thinking of first, is Square, which was founded by Jack Dorsey, who also happened to have co-founded Twitter. The company has raised more than $700 million, including a $150 million round this past October, valuing the company at $6 billion.
Square is often-rumored to be heading toward an IPO. The company was said to entertaining the thought of an IPO last year. The rumors were making their rounds—supposedly of talks with banks, like Goldman Sachs and Morgan Stanley. And Square hired former Salesforce.com exec Sarah Friar as its new CFO last year.
Dorsey, however, scuttled those plans in February of 2014, due to problems with revenue. Namely, the company is not profitable. With such a valuation, though, it seems likely that the company will go public sooner or later.
The other well-known startup to come out of the ecosystem was blogging platform Medium, founded by former Twitter CEO Evan Williams. The company raised $25 million in January of last year from David Sze and Josh Elman of Greylock Partners, with participation from angel investors and “friends of Medium.”
Three “Twitter Mafia” companies received funding in April of this year:
- Life science data management and collaboration platform Benchling, which was co-founded by Ashutosh Singhal, former software engineer at Twitter raised $5 million in a round led by Andreessen Horowitz with participation from Thrive Capital.
- Genetic testing firm Color Genomics, founded by Elad Gil, former VP of Corporate Strategy at Twitter and Othman Laraki, former VP of product management, raised a $15 million round led by Khosla Ventures and Formation 8, along with Emmerson Collective, Cisco CTO Padmasree Warrior, Katie Stanton, Julia Hartz, Jerry Yang, Max Levchin, Drew Houston, Aaron Levie; and Ann Mather.
- Indian services marketplace UrbanClap, founded by Raghav Chandra, formerly an engineer at Twitter, raised $1.6 million in funding from Flipkart backer Accel Partners, SAIF Partners, and Snapdeal founders Kunal Bahl and Rohit Bansal.
Two companies from the Twitter mafia have been acquired so far. Online-banking startup Simple, which was co-founded by Alex Payne, former platform lead at Twitter, was acquired by BBVA for $117 million. Incredible Labs, the company behind mobile personal assistant Donna, which was co-founded by by former Twitter product manager Kevin Chang, was acquired by Yahoo.
The most active investors in the Twitter Mafia companies have been SV Angel, Betaworks, and Khosla Ventures, CB Insights founded.
SV Angel has invested in five companies, while Khosla has been involved in six deals across four companies and Betaworks has made early stage investments in three companies including Medium, Incredible Labs and Pushd, whose co-founder and CEO is Abdur Chowdhur, who was formerly Chief Scientist at Twitter.
One company that didn’t really pan out was Jelly, from Twitter co-founder Biz Stone. The companyraised an undisclosed amount of funding from some big names, including Jack Dorsey, Bono, Reid Hoffman, Evan Williams and Al Gore.
The app was surrounded in mystery for a long time; perhaps too much mystery, as it never took off, and now CB Insights says Stone has already pivoted to his next startup.
(Image source: moustachemagazine.com)
