Kleiner Perkins creates a $100M iFund
Kliener Perkins along with Apple has created a $100M fund, called the iFund, which will be used to help create a development community for the iPhone. Today Apple announced quite a few new things for the iPhone, including Microsoft Server Exchange support and the the Software Developers Kit which will allow any developer to create their own applications for the iPhone. It looks like it will be a great platform, with alot of cool functions and features, but does it really need a $100M fund?
Since the iPhone is less than a year old and already has gained a large market share it seems like a hot product with alot of room for growth, both on its platform and in the consumers hands (on their ears?). Apple has announced that they will be controlling ALL application sales through their iPhone Apps Store. This will allow them to make that all apps have been approved by Apple and that they are malicious, or porn, or anything like that. It will also make sure that Apple gets a cut of each application that is sold (30%). They have however, allowed each developer the freedom to charge whatever they want for the applications they have developed, even if it is free. This store, the platform, and what appears to be the ease of development for these applications seems to be reason enough to build an application, but Apple seems to think it needs more.
So the iFund will help developers get up and going and get their ideas funded to develop iPhone applications. I just don’t understand what the exit strategy for these companies will be though. Other than Apple acquiring them I just don’t see another exit strategy. Seems like a great deal for Apple, but not a great deal for Kleiner Perkins or the developers who take funding. Although Kleiner Perkins is generaly viewed as one of the top VC firms in the industry, so maybe I’m just young and don’t understand the business well enough yet.
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