Media company Bloomberg is launching its own venture capital fund, called Bloomberg Beta today. With the fund, the company is putting aside $75 million to invest in early-stage startups. The fund, which has already put money into nine companies, is being led by Roy Bahat, chairman of video game hardware startup Ouya and former head of IGN Entertainment.
Bloomberg Beta shouldn’t be confused with Bloomberg Ventures, an internal incubator that the media company founded back in 2008. But that was shut down as co-founder Matt Turck left to go to FirstMark Capital. Instead, Bloomberg Beta is an independent venture firm for investing in outside startups and technologies.
The launch of Bloomberg Beta follows a trend of media and entertainment companies creating venture capital funds for investment in young, innovative companies. There are a number of examples out there already, such as Conde Nast, Hearst Interactive Media, and Time Warner Investments.
But unlike those companies, Bloomberg Beta is less interested in strategic investments and more interested in generating venture-type returns. Bloomberg Beta was formed as an independent entity with Bloomberg as its sole LP, sort of along the lines of the Google Ventures model. Bahat says the fund will be financially independent from Bloomberg, with no strategic imperative to work with the mothership.
However, while its investments won’t be considered strategic, the new fund will make bets on companies in areas that fit Bloomberg’s areas of interest. According to Bahat, that includes things like big data technology platforms, content discovery, media distribution, new organizational models, and human-computer interaction technologies.
Bloomberg Beta will be focused on early-stage opportunities, but is flexible about the terms of those investments. “We’re happy to go as early as the womb to find investable opportunities,” Bahat told me. “We’re happy to lead, or be the only check in. But we’re also happy to syndicate. We’re optimizing for the best companies.”
While flying under the radar, the fund has invested in nine startups already, including Newsle, MkII, Nodejitsu, Codecademy, Errplane, and ProsperWorks. Bahat tells me that there are a few more which the firm isn’t quite ready to announce.
In addition to investing in startups that are already formed, Bahat sees an opportunity to incubate startups within the fund itself. “We look at this as the natural progression of venture funds becoming progressively more operational,” Bahat said. That means funds that “both make companies and invest in them,” something which Bloomberg Beta plans to do. Betaworks might be the most famous example of this, but there are also firms like Lightbank and others that are following this same track.
Based in San Francisco at the same offices as Bloomberg West, and will have three partners at launch. Prior to founding Bloomberg Beta, Bahat was head of IGN Entertainment for five years while the media property was owned by News Corp. He is also chairman of hot new gaming hardware startup Ouya, and has also served on the boards of Revision3 and Flixster.
In addition to Bahat, the firm will have Karin Klein based in New York City to lead investments on the East Coast. Formerly the head of new initiatives at Bloomberg, she also served as vice president of Softbank’s venture fund, where she made investments in companies like Buddy Media.
Helping Bahat on the west coast will be James Cham, who recently served as a principal at Trinity Ventures with a focus on consumer services, enterprise software, and digital media investments. Before that, he was a VP at Bessemer Venture Partners.