Kleiner Perkins, Web Co.'s, Create $250M Fund for Social Media Startups

Venture capitalist Kleiner Perkins Caufield & Byers, along with Amazon, Facebook, Zynga Game Network, Comcast, Liberty Media and Allen & Co. LLC, last week initiated a special $250 million fund to invest in new social media and services startups.

The investors said that the sFund will offer financing, counsel and relationship capital for an expected next wave of social web companies. None of the participants disclosed how much they have, or will, contribute to the fund.

KPCB is no newcomer to crafting specialized, targeted funds nor to social media companies.

In 2008, the venture firm created the iFund, dedicated to funding startups building iPhone and iPad applications, and this past March doubled the fund's size to $200 million.

In July 2008, KPCG led a $29 million round of funding for Zynga, which makes casual games available on social networks such as Facebook.

To announce the sFund, KPCB hosted an event at Facebook's offices in Palo Alto, CA, attending by some of social media's top executives, including Amazon's Jeff Bezos, Facebook's Mark Zuckerberg and Zynga's Mark Pincus.

"The Web is being rebuilt around people, and we're at a point where any app, website, or device can be designed to be social from the ground up," said Zuckerberg. "We're focused on enabling entrepreneurs to build companies that can disrupt their industries."

Bing Gordon, a KPCG partner and former chief creative officer at Electronic Arts, and an Amazon and Synga board member, will administer the fund.

"Social is just getting started and the opportunities are vast," Gordon said. "As in the early days of the Internet, the race is on," he said. "Today every business, organization, and entrepreneur should have a social strategy."

In the U.S., 10 KPCB partners will work on the sFund with another four in Shanghai to extend its reach to China, officials said.

Some of the sFund's partner investors will offer assistance of one form or another to developers. For example, Amazon will provide start up support to developers through its web services, and will extend priority access at certain events and dedicated business and technical support.

Facebook said it will make available its platform teams, beta APIs and new programs such as Facebook Credits. Zynga said that it will host some sessions on management and technical development such as open source collaboration.

KPCB listed among its social ventures Cafebots, Flipboard, Jive and Lockerz. Cafebots is the first to benefit from the sFund, receiving $5 million, according to this report and a number of others.

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