It’s a good day for ngmoco, which was just acquired by Japan’s DeNA for up to $400 million. But it’s also a good day for ngmoco’s first investor, Kleiner Perkins Caufield & Byers. In one deal they’ve completely paid off their controversial first iFund, a $100 million fund to spur iPhone app development.
Kleiner invested just a little over $10 million of the $45 million that ngmoco raised in total. And since Kleiner was in first at a low valuation, they own a big chunk of the company – more than 25%. That means, with the earnout, Kleiner stands to take more than $100 million off the table in the acquisition. Even without the earnout, Kleiner will take more than $75 million in the deal.
“I believed in CEO Neil Young since I saw him bring Ultima Online to market at EA in the 90s,” said Kleiner partner and ngmoco board member Bing Gordon. “He’s been a more capable first time CEO than I imagined was possible.”
“We started the iFund when we saw a blue ocean,” said Bing, referring to the new, uncontested market when the iPhone launched, “and that ocean is now turning green.”
This deal pays off the first iFund and then some, and the other 14 investments from the fund are all gravy (one of those is Zynga).
It’s not surprising, then, that Kleiner doubled down on the iFund earlier this year, earmarking another $100 million to Apple-focused investments.
This is also a big step for the Apple ecosystem. Ngmoco is almost entirely Apple-focused, although they have recently started building for Android devices, too. Google Ventures made a recent investment in the company, at a rumored $150 million valuation, which certainly helped that process along.
Gordon also praises Apple, saying that it’s “astonishing” that an already successful Apple would deeply support a new gaming platform. Apple promoted many ngmoco titles, helping the company succeed.
Of course everyone’s happy today and popping open the champagne. But it is worth noting that, like Facebook, Apple’s ecosystem is robust enough to allow new companies to be built, reach profitability, and have a liquidity event.
ngmoco (“Next Generation MObile COmpany”) is creating and producing games for the iPhone. CEO Neil Young is a former executive from Electronic Arts, where he oversaw the development of several hit titles. Another EA vet and partner at Kleiner Perkins, Bing Gordon, sits on the board. Kleiner is an investor through its iFund.
Kleiner Perkins Caufield & Byers (KPCB) is a well known Silicon Valley venture capital firm, due in large part to their past success. They were early investors in many significant companies, including Amazon, AOL, Compaq, Electronic Arts, Google, Intuit, Macromedia, Netscape, Segway, and Sun Microsystems. The name of the firm comes from the four founding partners: Eugene Kleiner, Tom Perkins, Frank J. Caufield, and Brook Byers. In March 2008, KPCB announced the iFund, a $100M investment initiative focused on ideas...
Bing Gordon joined Kleiner Perkins Caufield & Byers in 2008. At KPCB, he leads on the sFund, the investment initiative to fund and build applications and services that deliver on the promise of the social web. The sFund, launched in late 2010 with strategic partners Amazon, Facebook, Zynga, Comcast, Liberty Media and Allen & Co, has made 14 investments to date, including 4 seeds. Bing serves on the board of directors of sFund companies Lockerz, Cafebots and Klout; sFund...
Neil Young is the founder and CEO of iPhone-game maker ngmoco, which he started in June of 2008. Young started the company after 11 years working at Electronic Arts, most recently as the Group General Manager of the EA|Blueprint Studio group that included Maxis (creators of Sporeâ„¢ & The Simsâ„¢) and EAâ€™s collaborative partnership with Steven Spielberg. Neil joined Electronic Arts in 1997 as the General Manager of EAâ€™s Origin Systems subsidiary, where he supervised the launch...