Iconic VC Firm Kleiner Perkins Considering Focused Fund For Cloud Startups

Iconic VC Firm Kleiner Perkins Considering Focused Fund for Cloud Startups

More than 6 months back, I had written about the launch of the first cloud computing ETF, and how, in my mind, that represented cloud computing’s acceptance in the mainstream investing community (See: Packaging Cloud Computing as an Investment – First Cloud Computing ETF Launched). Now, this latest development may not be as mainstream, but it is certainly important considering the venture capital firm involved – Kleiner Perkins Caufield & Byers.

According to a Bloomberg news report , the VC firm is contemplating starting a new fund focused on startups selling cloud services to corporations. Matt Murphy, a partner at the firm, has been quoted as saying that the partners “have talked about it, and are intrigued by the idea,” even mentioning a possible figure of $100 million of investment this year.

VC firms backing cloud startups is nothing new. After all, that has been the regular focus of several recent articles. However, when Kleiner Perkins talks about a focused fund for this purpose, the world takes notice. Why is it so?

This is because Kleiner Perkins enjoys a reputation unsurpassed in the venture capital community. After all, they had backed some of the biggest technology companies of our time, including Amazon.com, Sun Microsystems, Electronic Arts, Genentech, Intuit, AOL and Google. Not for nothing has the Wall Street Journal hailed Kleiner Perkins it as one of the “largest and most established” venture capital firms in the world. Other encomiums include New York Times’ “one of Silicon Valley’s most prominent venture capital firms,” and Reuters calling it “one of the most successful venture capital firms in the world.” Thus, many of the most prominent names in technology owe a lot of their success to Kleiner Perkins.

It’s not that Kleiner Perkins is a stranger to cloud computing. In fact, it had backed Puppet Labs (See: Cloud Computing Startups Raise Big Money: UPDATE 4)  and Nebula last year (See: The Hottest New Cloud Computing Startup: Nebula), along with eight other cloud startups, collectively putting in $100 million. More recently led a $20 million Series C round for AppDynamics. But the creation of a specific fund for this purpose is good news for cloud computing in general and cloud computing startups in particular.

And there’s good reason why Kleiner Perkins is considering such a move. According to Matt Murphy, “Companies’ comfort level and willingness to adopt the cloud is hitting an acceleration point. Now’s the most interesting time in the last 10 years to be investing in enterprise-based companies.”

If the cloud startup fund does happen, it would not be the first such fund for Kleiner Perkins. The firm already has the $200 million iFund that invests in applications, services and components for mobile Internet devices, and another $250 million fund focused on social startups.

By Sourya Biswas


Sourya Biswas is a former risk analyst who has worked with several financial organizations of international repute, besides being a freelance journalist with several articles published online. After 6 years of work, he has decided to pursue further studies at the University of Notre Dame, where he has completed his MBA. He holds a Bachelors in Engineering from the Indian Institute of Information Technology. He is also a member of high-IQ organizations Mensa and Triple Nine Society and has been a prolific writer to CloudTweaks over the years... http://www.cloudtweaks.com/author/sourya/

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