Carnival Labs, a New Zealand- and New York-based mobile agency turned platform has raised $2.4 million in venture investment co-led by Gary Vaynerchuk and Lerer Ventures, with participation from Mike Brown Jr.’s Bowery Capital, FlyBridge Capital Partners, Google Ventures, David Tisch, Jos White, and Michael Lazerow.
Carnival Labs calls itself a “mobile brand accelerator,” which is a bit of a bullshit term. My assessment? It is a SaaS platform for mobile; think Buddy Media for mobile apps. Considering Buddy’s CEO Mike Lazerow has invested, and Gary V drew the comparison himself, I’m going to call that characterization a safe bet.
Carnival Labs started as a mobile development agency in 2008, Brown says, but quickly saw that’s not a great business to be in. Since then, mobile has exploded and brands have brought app development functionality in-house. Beyond that, many existing mobile development agencies out there do this kind of thing very, very well. Carnival noticed a need for a cohesive platform to helps brands and agencies with many mobile apps to coordinate and pool resources, so the company built it.
Carnival’s platform includes functions that help brand managers to find audience overlap between various apps, cross-market to them when it makes sense, use co-registration, and coordinate on messaging and in-app ad spend. “Agencies or brands say, ‘Now we have 50 mobile apps and no way to understand them from a cross-platform perspective,’ and this is an easy way,” Brown says. The company counts One Direction, Nabisco, Coca-Cola, and Oreo among its clients.
The deal marks the first investment from Brown’s outfit, Bowery Capital, which launched in May with a $33 million fund. The fund includes investment from AOL and wraps in prior angel investments made by Brown in companies like CodeAcademy, Sailthru, Premise, and Moat. AOL Ventures has a portfolio of 27 companies and continues on under the leadership of Jon Brod.
Given AOL’s specialty in media, along with the fact that two of Bowery Capital’s four portfolio companies are media-related (Sailthru and Moat), it’s not surprising that he’d kick things off with a brand-facing play.
Besides, in New York, calling anything “The Buddy Media of ____” is bound to get you at least a few investor meetings. When the city’s third-biggest tech exit sold for $689 million to Salesforce last summer, a million Social SaaS startup companies were hatched. The company’s name is interchangeable with Social media SaaS platforms. I’m guilty of it myself — see here, here, and here.
Bowery Capital’s idea is to back “next-generation” enterprise businesses that sell their software solutions to “next-generation” executives. The strategy also includes the kind of deep support for portfolio companies similar to the model pioneered by First Round Capital. Earlier this year, First Round’s Josh Kopelman asked at a PandoMonthly event why venture capital, the industry that funds innovation, is so un-innovative?
As capital becomes a commodity, more companies will take Carnival’s approach when raising their first outside capital: drum up excitement in the market, then find the VCs who know your industry. Among them, weed out the passive money. Pepper in some brand-name angel investors, preferably ones in your industry.
Though most early-stage startups will disagree, winning over investors is the easy part — now Carnival needs to win over clients.
[Disclosure: Lerer Ventures and Josh Kopelman are investors in PandoDaily.]
Image courtesy The Pug Father on Flickr