Kleiner Perkins Caufield & Byers announced that it put another $100 million into its iFund in late March, but there was some question as to where exactly the $100 million will come from.
KP launched the iFund in March 2008, saying it would invest $100 million in applications related to Apple’s popular iPhone. The expanded fund will continue to invest in iPhone apps, as well as applications for Apple’s new tablet computer, the iPad.
Asked if the additional $100 million would be carved out of KP’s existing core fund, Partner John Doerr said: “This is new money we have committed.”
And yet VCJ was unable to find a regulatory document indicating that KP had raised $100 million for the iFund. Additionally, one KP limited partner said he was unaware of any fund-raising effort for the iFund and wasn’t pre-briefed on the announcement about the expansion of the fund.
It seems possible that the capital could have come from the firm’s fund-raising efforts for three of its core funds last year, which as a group raised at least $415 million of a targeted $740 million, according to documents filed with the SEC in February 2009. KP raised $135.4 million (of a targeted $150 million) in an annex fund for its 11th fund, which originally closed on $400 million in 2004, and it raised $280.5 million (of a targeted $350 million) to bolster its 12th fund, which originally closed on $600 in 2006, the documents show. The firm also planned to raise about $240 million more for its 13th fund (vintage 2008) to bring that fund’s total to $950 million, according to the documents.
VCJ sought clarification from Doerr via email, but he did not respond. A spokesperson at KP’s public relations firm said, “This is not a new fund, it’s an expansion of the iFund,” but she said she did not know the source of the new capital.
KP announced the expansion of the iFund at a press event at its Sand Hill Road headquarters last Wednesday. Much of the event was spent talking about the iPad, which was scheduled to be released on April 3 (a Saturday).
“This Saturday the iPad arrives,” Doerr declared. “We believe it’s going to rule the world.”
Clearly awed by the technology, he later remarked: “I have touched it, I’ve held it, caressed it.”
This Saturday the iPad arrives. We believe it’s going to rule the world. … I have touched it, I’ve held it, caressed it.
Doerr went on to say that the iPad will ship with 11 apps from iFund-backed companies, with 20 more applications in development.
Kleiner said in a press release that the iFund is “agnostic to size and stage of investment and invests in companies building applications, services and components.” Its areas of interest include location-based services, social networking, mCommerce (including advertising and payments), communication, health care, education and entertainment, according to the statement.
Doerr appeared particularly bullish about iPad apps for health care and education. “Every doctor, nurse and patient should be using an iPad,” he said. He later said that one of the iFund’s stealth companies would release an iPad-only application within five weeks and predicted that “we’ll see education apps which will transform things.”
To date, the iFund has invested in 14 companies, including three that are in stealth mode. See Table of iFund Investments.
Doerr said the startups have collectively raised $330 million and as a group will produce more than $100 million in revenue this year. Matt Murphy, a KP partner and manager of the iFund, said four of the companies are “cash-flow profitable,” but declined to name them.
Companies in the iFund portfolio include Booyah, developer of a location-based iPhone game; Cooliris, developer of an iPhone content-discovery app; Gogii, developer of a free texting app for the iPhone; iControl, developer of home monitoring and management software; ng:moco, an iPhone game developer; Pelago, operator of a mobile and Web-based social network; Pinger, provider of instant voice messaging for mobile phone users; Shazam, developer of a song ID service for mobile phones; Shopkick, developer of a charitable donation iPhone app; and Zynga, a developer of social games.
KP has been cryptic about the financial structure of the iFund since its creation. Murphy told VCJ in March 2008 that the iFund wasn’t a formal fund. He described it as a $100 million allocation raised from the firm’s existing limited partners and said it could grow and didn’t have a set lifespan. “There’s no hard cap on this,” Murphy said at the time. “If we see opportunities beyond the $100 million, we’ll increase the allocation.”
Murphy declined to comment on the structure of the allocation, but said it wouldn’t cannibalize the firm’s other initiatives, such as its cleantech effort or its $200 million KPCB Pandemic Preparedness and BioDefense Fund.
Additional reporting by Poornima Gupta of Reuters, Dan Primack and Alexander Haislip