A Start-Up Factory Media Guys Like: K2 Raises $7.5 Million
Some start-up investors spray and pray — tossing smallish checks to lots of hatchling companies in the hopes that a few of them pan out. Media/tech investors Daniel Klaus and Kevin Wendle are at the other end of the spectrum: Their K2 Media holding company is making a few bets, and going all in on them.
Now K2 has attracted its own investors, who have put a total of $7.5 million into the company. Many of the boldfaced names will be familiar to media folks, including Bob Pittman, Strauss Zelnick, Casey Wasserman and Jon Miller, who heads up digital at News Corp. (which also owns this Web site).
That money is supposed to help K2 build up to three companies a year, making investments of $250,000 to $1 million to get them going. They’ll be primarily focused on media, mobile, or both — the two had previously raised an AppFund that took a different approach to wooing iOS developers.
Klaus likens K2’s approach to the one former DoubleClick executive Kevin Ryan took a few years ago, when he seeded a handful of companies including Music Nation, which Klaus co-founded (another one was the publication that’s now called Business Insider, where I used to work).
Ryan eventually ended up focusing almost all of his attention on Gilt Groupe, his “flash sale” site, and perhaps if Klaus and Wendle end up with the same kind of breakout success story in their lineup, they may end up making a similar choice.
But for now, the pitch is that they’re going to focus all of their attention on building up a small portfolio, investing lots of time and energy into each company — and getting a decent chunk of equity in return. “We’re not giving people $25,000 and space to hang out at. We’re really building businesses,” Klaus says. “We’ve very engaged operationally.”
So far, K2’s list includes Fingerprint, a mobile education play; Tracks, a mobile photo sharing app; and Sonar, a mobile “friend-finding” app. All of those companies have plenty of competition — “social discovery” apps like Sonar are the trend of the month, for instance. And perhaps you’ve heard of Instagram. But if no one else was interested in that stuff, it wouldn’t be any fun.