It’s not often that Silicon Valley’s two most legendary venture capital firms join together. When they do, they typically make a lot of money.
Kleiner Perkins Caufield & Byers and Sequoia Capital are at it again, this time providing funding at the very early stage. The firms invested nearly $5 million in Karma, a San Francisco startup that’s hoping to help consumers give relevant and timely gifts to people in their social network.
Kleiner and Sequoia, located less than a mile apart on Menlo Park’s Sand Hill Road, made billions in 2004 from their early investment in Google. The firms, which were both founded in 1972, also jointly backed Electronic Arts, Symantec and Cypress Semiconductor. Most recently, they poured a combined $30 million into Jive Software in 2010, profiting last year when the company went public.
“We’re very lucky to have these guys involved,” says Lee Linden, co-founder and chief executive officer of Karma. “They both really wanted to be involved and made it clear they could add value.”
Linden, who previously co-founded mobile advertising company TapJoy, said Kleiner and Sequoia were equal participants in the funding round. Other backers include the Obvious Corp., the investing group started by Twitter co-founders Evan Williams and Biz Stone.
Karma, which is making its public debut today, is using the funds to build technology that analyzes Facebook profile pages and tells members when their friends are celebrating a birthday, anniversary or birth of a new child. The company has partnered with a couple dozen merchants, including baby toy companies, chocolate makers and wineries.
If Linden can create the next Google, there will be plenty of Karma to go around.