Kleiner Perkins earmarks $100m for iPad apps

The imminent launch of Apple’s iPad continued to reverberate across Silicon Valley on Wednesday as Kleiner Perkins, one of the Valley’s most prominent start-up investors, earmarked $100m for new software applications for the iPad and similar devices.

John Doerr, a Kleiner Perkins partner, forecast that Apple’s new tablet computer would trigger a second wave of innovation that would match the one generated by the launch of the iPhone three years ago, and could even eventually exceed it.

Many venture capital firms have invested in start-up companies that build software applications, or apps, for the iPhone and similar touch-screen smartphones, with some, such as the AppFund and Vexiom Equity Partners, even setting up separate investment vehicles to back these small-scale developers.

However, Kleiner’s decision to invest $100m in iPhone applications in the early days of the device, when apps were still a cottage industry, became one of the most visible expressions of confidence that an important new technology platform had arrived.

Kleiner said on Wednesday that it had invested the original iFund in 14 developers, four of which had now reached cash flow profitability, and was adding another $100m for a second wave of investment, much of it tied to the iPad.

Kleiner is backing two companies whose applications are being developed exclusively for the iPad, said Mr Doerr, though most will also target the iPhone and other touchscreen devices.

In a characteristically optimistic assessment of the potential impact of the iPad, which is due to go on sale in the US on Saturday, Mr Doerr compared it to the early years of the personal computer and the internet.

“The third renaissance in software is happening,” he said. “We’re going to move beyond spreadsheets and word processors and browsers.” The arrival of touch screens meant that users’ interaction would change, bringing a shift in personal computing, he added.

The Kleiner partner was famous for his expansive statements at the time of the dotcom bubble, which he called “the greatest legal creation of wealth in history” – a comment that came back to haunt him in the ensuing crash.

His start-up investments have included some of the most successful internet companies, including Amazon and Google, where he is a director. He was also one of the first and most voluble Silicon Valley investors in the alternative energy and “clean tech” sectors.

Mr Doerr said that the larger screen on the iPad was likely to breathe life into a wider range of applications than have been seen so far on the iPhone, with e-commerce and healthcare two of the biggest potential new markets.