It’s the same old story: Mobile company is founded in a college dorm room. Company gets customer traction and raises VC funding. VC firm realizes it just invested in a bunch of recent college grads, so it seeks out experienced executives to bring mobile company to the next level.
The mobile company this time is 3GUpload, a Seattle-based company that allows its 4 million subscribers to find, organize and store ringtones.
A founding trio from Purdue University and Indiana University had bootstrapped the company. But last week, the company announced that it scored $20 million in first-round funding from VantagePoint Venture Partners.
Half of the money will be used to help 3GUpload evolve into a robust, mobile social networking company, while the other half will be used to buy Vancouver-based Web-to-mobile startup MoPhone Inc.
The MoPhone acquisition is partially for technology assets, but the main value is a group of senior managers led by QPass co-founder – and former Atlas Venture investor – Bill Bryant.
“The 3G guys have great insights into the mind of younger users, but they haven’t built a company before,” says Eric Ver Ploeg, a managing director with VantagePoint. “Bill and the rest of the MoPhone team have scars on their backs.”
Bryant will take over as QPass CEO (he was already living in Seattle). He says that 3G is not looking to become a mobile version of MySpace or Friendster.
Instead, it will be a place where users can share content (such as ringtones, concert photos, wallpapers, etc.), gift licensed content or recommend content in return for kickbacks. Like MySpace, however, 3GUpload could become a service provider to mobile virtual network operators.
“We aren’t getting into voice services or handsets, but we definitely could be a service partner to a company like Helio or Amp’d,” he explains.
One big reason for MVNOs to be interested is that 3GUpload provides record companies with easy-to-understand monthly statements, which has helped foster strong music industry ties. This will become increasingly important as songs are initially released as ringtones for sale for $2 to $3 each.
“We first noticed [3G] last year when we were looking at the mobile content space,” Ver Ploeg recalls. “They politely said they weren’t interested in venture financing, because they were cash-flow positive… But they had a desire to take things to the next level, and it’s now really something of value.”