Early Twitter investors double down on consumer Web start-ups

Tue Nov 5, 2013 6:05pm EST
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By Sarah McBride

SAN FRANCISCO (Reuters) - For Twitter Inc's early venture capital backers, some of whom stand to make over 500 times their investment when the company goes public, now is a time not just to celebrate but increase their stakes in mobile and social media.

Take Bijan Sabet, the partner at Spark Capital who led his firm's investment in Twitter in 2008. At the time, according to a person familiar with the matter, Twitter was valued at $100 million. This week, the company is seeking a valuation of up to $13.6 billion in its initial public offering.

"Most of what I've been doing," Sabet said in a phone interview, "is being hyperfocused on consumer Web and mobile products."

That includes investing in some of the same people who brought him Twitter. One of them was Lift, a mobile phone app that promotes positive habits, which grew out of the Obvious Corp, the incubator created last year by Twitter co-founders Biz Stone and Evan Williams.

In May, Sabet invested in Stone's latest venture, Jelly, which has not announced details of its business except that it plays into consumer- and mobile-oriented themes - and takes its inspiration from the brain of jellyfish.

"For the past 700 million years, this decentralized structure has been wildly successful," Stone wrote in a blog post about his new venture.

Mike Maples, the managing partner of Floodgate Fund who invested $25,000 in Twitter in 2007, when the company was valued at $25 million, said he is developing a strong interest in what he calls programmable services.

By that, he means efforts to use the Internet to organize everything from a ride to running errands. He has invested in the ride-sharing firm Lyft and the odd-job platform Taskrabbit.   Continued...

An illustration picture shows the search for the Twitter IPO date on top of Twitter logos on a computer screen in Frankfurt, October 21, 2013. REUTERS/Kai Pfaffenbach