Facebook, Accel and Founders Fund Launch fbFund; To Give Grants To Facebook App Startups
During his keynote conversation with Michael Arrington this afternoon at the TechCrunch40 conference, Facebook founder and CEO Mark Zuckerberg announced that the company will be launching a new entity called fbFund with Accel and Founders Fund.
Context & Ripple Effects
The announcement extends a fast-forming pattern: in July 2007, Bay Partners launched the first venture fund dedicated solely to Facebook applications, and two months later Facebook itself is stepping onto the field. Unveiling fbFund from the TechCrunch40 keynote stage rather than a press release puts Zuckerberg's imprimatur on the app economy his platform created.
The structure matters as much as the money — grants, not equity rounds, aimed at Facebook app startups, with two of Silicon Valley's marquee firms, Accel and Founders Fund, as partners. A company valued north of $1 billion is now underwriting its own developer base alongside outside capital.
First-order effects
- Facebook app developers gain a new source of non-dilutive grant capital, lowering the barrier for small teams to keep building on the platform without selling equity.
- Bay Partners' apps-only fund suddenly has a rival for deal flow — and one backed by the platform owner itself, which can signal to founders where official favor lies.
Second-order effects
- Other investors face pressure to specialize or differentiate: when the platform and its partners fund apps directly, generic seed money for social apps loses its pitch, pushing VCs toward adjacent niches like tools, analytics, or other networks.
- Grant recipients become de facto showcase apps, shifting distribution and attention inside Facebook toward funded teams — an advantage competitors building on MySpace or standalone sites cannot easily match.
Third-order effects
- If platform owners routinely co-finance their own ecosystems, funding becomes an instrument of platform control — capital steers which apps thrive, blurring the line between neutral infrastructure and curated marketplace.
- The model points toward corporate venture programs as standard practice for consumer platforms, with each major network expected to run its own fund to hold developers inside its walls.
The trend: Platform owners and their investors are formalizing dedicated capital pools for apps built on their own networks, turning financing itself into a lever of ecosystem control.