Real-Time Startup CoTweet Raises Real Money
It's the latest sign of Silicon Valley's zeal for startups that exploit Twitter: CoTweet, a company that offers software to help business send and receive messages from multiple Twitter accounts, is announcing a $1.1 million round of financing Thursday and opening to the public.
Context & Ripple Effects
Twitter's own fundraising set the stage: the service took another round of funding back in April 2008 while still searching for a business model, and by mid-2009 a layer of third-party tools — TweetDeck, Tweetie, TweetMeme — had grown up around it. Days before this announcement, Twitter publicly affirmed its support for that developer ecosystem, naming several of those services as proof.
CoTweet's $1.1 million round and public opening mark the point where that tool layer attracts institutional money aimed specifically at businesses rather than consumers — software for companies juggling multiple Twitter accounts. The bet rides entirely on a platform Twitter itself controls, as its handling of its own finances and its trend list (Moonfruit's unconfirmed removal from trending topics earlier that week) both illustrate.
First-order effects
- Businesses managing multiple Twitter accounts gain a funded, generally available tool built for that job, ending reliance on ad hoc consumer apps or manual account-switching.
- CoTweet moves from invite-stage to open product with $1.1 million to spend on scaling — capital that signals investor appetite for enterprise layers on Twitter.
Second-order effects
- Rival third-party clients like TweetDeck and Tweetie face pressure to add team and multi-account features for business users, or cede the enterprise segment to CoTweet.
- Every dollar invested in the Twitter tool layer deepens the ecosystem's dependence on Twitter's API and policy decisions — the same company whose trending-topics behavior drew questions just days earlier.
Third-order effects
- If the pattern holds, hot consumer platforms spawn a class of VC-funded 'picks and shovels' startups whose entire value rests on one company's goodwill, making platform-owner API and policy choices de facto gatekeeping over whole startup categories.
The trend: Venture capital is following user growth onto Twitter, funding thin application layers on top of the platform faster than the platform itself has found a revenue model.