Despite its experience of backing Internet deals, Benchmark Capital has added a venture partner to help the firm identify interesting consumer technologies.
Richard Barton – who founded the travel site Expedia while he was a young Microsoft employee – has been informally advising Benchmark for several years.
But last week, the Menlo Park, Calif.-based firm formalized the relationship and announced Barton has joined the firm. Barton had led Expedia during its $73 million IPO in 1999 and had remained as CEO until 2003, when USA Interactive merged with the company in a $3 billion transaction.
“Rich’s background may be unmatched out there,” says Benchmark Partner Bill Gurley. “He was there for the entire ride at Expedia, which grew into a $10 billion company. Not many Internet companies have reached that market cap, and, in most cases, their founders aren’t running their companies by then.”
Benchmark isn’t alone in beefing up its bench of consumer investors.
Barton is but the latest Internet entrepreneur to be brought into the venture community for his consumer expertise.
Several weeks ago, Mayfield announced that it was hiring as a venture partner Raj Kapoor, who founded the online photo business Snapfish.
Enterprise Ventures in La Jolla, Calif., plans to hire an investing partner with consumer expertise this year, according to general partner Bill Stensrud.
Fact is, investing in the Internet is nearly as attractive as it was five years ago.
Says Mayfield Managing Partner Janice Roberts, “We’re looking at more consumer deals, and though we felt that based on the market landscape today, we were covered, Raj is a little younger at 34, he came up during the Internet era, and he knows about consumer-facing businesses.”
Stensrud of Enterprise notes that the firm is shifting from semiconductor, software, and networking investing and expects a much larger percentage of its investments to be in the consumer sector rather than within the enterprise space, where he says that spending growth has ceased. As a result, “we’ll be hiring a partner to focus on the consumer space. I just don’t know yet if it will be someone specializing in media or appliances,” Stensrud says.
Barton has not joined the boards of any Benchmark companies and he may not do so. Gurley says that a lot of the finer points of Barton’s employment with Benchmark “are to be determined.” But in the meantime, Barton gives Benchmark help with its consumer investments, and a presence in Seattle, where he lives and where he is also CEO of his own stealth consumer startup, Zillow.com.
Still, Gurley is as optimistic as ever. “Internet companies have returned more to VCs than any other industry if you consider what eBay, Google, Amazon, Yahoo and Expedia have returned to investors.”