Another $40 million for Jawbone from Kleiner Perkins, Deustche Telecom
Jawbone, a San Francisco-based company that makes mobile lifestyle accessories such as Jambox and Up, a personal health device, has raised another $40 million in new funds from Deutsche Telekom, Kleiner Perkins Caufield & Byers …
Context & Ripple Effects
The round lands mid-pivot for Kleiner Perkins: the firm confirmed in March 2011 that it was chasing late-stage growth capital as super angel investing fell out of favor, and it was already raising a fund of more than $1 billion as of October 2010. A $40 million check into a consumer-hardware maker fits that pattern — bigger tickets, proven products.
It also extends the firm's mobile thesis. Kleiner Perkins marked the iFund's third anniversary in June 2011 with portfolio downloads past 300 million, and Jawbone's Jambox speaker and Up health band both ride on the smartphone ecosystem that fund was built around. Deutsche Telekom's participation adds a carrier balance sheet to the cap table, an unusual pairing for an accessories company.
First-order effects
- Jawbone gets fresh capital to scale manufacturing and retail distribution for Jambox and Up, entering 2012 with two shipping product lines instead of one.
- Kleiner Perkins adds a flagship consumer-hardware position to its mobile portfolio at exactly the moment its confirmed strategy favors larger, later-stage bets over seed-style checks.
Second-order effects
- Rival makers of Bluetooth speakers and health trackers now face a competitor with top-tier venture backing and a carrier investor, forcing them to raise comparably or differentiate on price.
- Deutsche Telekom's stake signals to other European operators that accessory makers are strategic assets worth owning a piece of, potentially prompting peers to pursue similar positions rather than plain retail partnerships.
Third-order effects
- If carrier strategics keep co-investing alongside venture firms, consumer-hardware funding drifts toward fewer, larger rounds in which distribution relationships matter as much as the check size — a structural shift away from the small-seed model Kleiner Perkins itself moved away from during 2011.
The trend: Mobile-hardware venture funding is consolidating into larger, later rounds, with carrier strategics like Deutsche Telekom joining firms like Kleiner Perkins at the table.