Shazam's Newest Fan Is Kleiner Perkins's iFund
For cellphone owners, Shazam has abolished the nagging question about which song is playing. Its cellphone application lets people simply hold the phone toward the source of the music to identify it. — It will soon be able to do a lot more …
Context & Ripple Effects
Shazam's path from niche audio-fingerprinting service to mainstream consumer brand has run entirely through Apple: the British firm's app ranks among the most popular on the iPhone, and it has been featured in Apple's own commercials identifying songs playing nearby, as its 2008 emergence out of the shadows showed. The company has also been reportedly exploring ways to get users to share tagged music with each other, per earlier coverage.
The new development is money: Kleiner Perkins's iFund is investing in Shazam. That matters because Kleiner publicly halted investments in Web 2.0 startups back in 2007 as that sector lost favor — so a marquee consumer iPhone app drawing iFund capital marks where the firm believes the next platform cycle sits.
First-order effects
- Shazam gains Kleiner Perkins capital and validation to push past pure song identification into broader features — the Bits piece notes the app 'will soon be able to do a lot more' than answer which song is playing.
- Apple's ecosystem gets another proof point that third-party apps can become venture-scale businesses built on its platform, reinforcing the iPhone's pull for developers.
Second-order effects
- Rival music-discovery and tagging services now face a better-funded competitor with privileged placement in Apple marketing, raising the bar for distribution on the App Store.
- Labels and artists gain a richer listener-data channel: every tag is a signal about what people are actually hearing, which shapes how music gets marketed to phone owners.
Third-order effects
- If the pattern holds, venture capital keeps rotating out of general Web services and into single-platform mobile apps, with funds like the iFund acting as gatekeepers for which app categories scale first.
- Consumer apps built on recognizing the world around you — audio today, potentially other media later — position themselves as search layers for the physical environment rather than mere utilities.
The trend: Venture funding is migrating from Web 2.0 startups to smartphone-platform applications, with dedicated vehicle funds like Kleiner Perkins's iFund picking the winners of the App Store era.