Chamath Palihapitiya Personally Buys Majority Stake in Mobile Development Shop Xtreme Labs
Competition for mobile developers is so fierce that one venture capitalist just committed as much as $20 million over the next three years to get access to 100 of the best engineers in the business.
$20 million of his own money.
Chamath Palihapitiya, of the Social+Capital Partnership, has just bought a majority stake in Xtreme Labs, a Toronto-based mobile development shop that has built apps for Microsoft, Groupon, IAC, GroupMe, Rypple and more.
Palihapitiya knew Xtreme co-founder and CEO Amar Varma from college in Canada, and brought the Xtreme team in to help with some projects at Facebook a few years ago, when he was leading the mobile team. He followed their progress as they built a sort of “Pivotal Labs for mobile,” as an agile development shop helping partners create some 300 apps that now have more than 300 million downloads.
Palihapitiya told me the deal makes sense in light of the current scarcity of good mobile developers. It will be worth it to him to be able to use Xtreme’s spare time to help with Social+Capital projects, and to spin out interesting start-ups. And Xtreme is now working on open-source frameworks that will bring its native app expertise to a broader audience.
Palihapitiya put $6 million into the company upfront, he said, and has committed $20 million over the next three years.
Xtreme co-founder and CTO Sundeep Madra told AllThingsD that some examples of the company’s work around mobile user interface have included some of the earliest implementations of infinite scrolling on the iPad, as well as a circular pop-up menu — both part of an app developed for Shutterstock.
Xtreme previously subsisted on its own revenue. Building an app with Xtreme starts at hundreds of thousands of dollars for the smallest projects, Varma and Madra said, and the company works on about a hundred projects per year.
Beyond consumer mobile apps, Xtreme is now also breaking into building apps for the enterprise, cars, health care and education, the co-founders said.