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Tag: A-Fund

Android in Kenya

I mentioned before when discussing DCM’s Android Fund that Android is a truly global opportunity. While Nokia is probably praying that this is untrue, the recent success of Huawei in Kenya with its IDEOS phone illustrates that Android isn’t just doing well in the First World, its particular approach makes it well-suited to tackle the broader global market (HT: MIT Technology Review):

Smart phones surged in popularity in February after Safaricom, Kenya’s dominant telecom, began offering the cheapest smart phone yet on the market—an Android model called Ideos from the Chinese maker Huawei, which has been making inroads in the developing world. In Kenya, the price, approximately $80, was low enough to win more than 350,000 buyers to date.

That’s an impressive number for a region most in the developed world would probably write off as far too developing to be interesting. Now Huawei’s IDEOS line is not going to blow anyone away – its small, has a fairly low quality camera, and is pretty paltry on RAM. But, the fact that this device can hit the right price point to make the market real is a real advantage for the global Android ecosystem:

  • This is 350,000 additional potential Android users – not an earth-shattering number but its always good to have more folks buying devices and using them for new apps/services
  • It’s enticing new developers into the Android community, both from within Kenya as well as from outside of Kenya. As the MIT Technology Review article further points out:

    Over the past year, Hersman has been developing iHub, an organization devoted to bringing together innovators and investors in Nairobi. Earlier this month, a mobile-app event arranged by iHub fielded 100 entrants and 25 finalists for a $25,000 prize for best mobile app. The winner, Medkenya, developed by two entrepreneurs, offers health advice and connects patients with doctors. Its developers have also formed a partnership with the Kenyan health ministry, with a goal of making health-care information affordable and accessible to Kenyans…

    Some other popular apps are in e-commerce, education, and agriculture. In the last group, one organization riding the smart-phone wave is Biovision, a Swiss nonprofit that educates farmers in East Africa about organic farming techniques. Biovision is developing an Android app for its 200 extension field workers in Kenya and other East African countries.

  • Given the carrier-subsidy model and the high price and bulkiness of computers, this means that there could be an entire generation of individuals who’s main experience with the internet is from using Android devices, not from a traditional Windows/MacOS/Linux PC!

This ability to go ultra-low end and experiment with new partners/business models/approaches is an advantage of the fact that Android is a more open horizontal platform that can be adopted by more device manufacturers and partners. I wouldn’t be surprised to see further efforts by other Asian firms to expand into untapped markets like Africa, the Middle East, and Southeast Asia with other interesting go-to-market strategies like low-cost, pre-paid Android devices.

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DCM Raises $100M Android Fund: Looking for Great Ideas

Full disclaimer: While I work for DCM, the views expressed in this blog are mine and mine alone and do not necessarily reflect the views of my current (or past) employer, their employees, partners, clients, and portfolio companies.

If you follow the tech trades about Android as much as this “fandroid” does :-), you’ll have seen an announcement from leading venture capital fund DCM which I found extremely exciting:

MENLO PARK, Calif. – TOKYO, Japan – April 21, 2011

Today, leading Pacific Rim technology venture capital firm DCM announced the launch of the world’s first Android-focused fund (“AFund”). The A-Fund is a $100 million strategic investment initiative that will focus on startups developing compelling solutions taking advantage of Android’s rapid growth.
The A-Fund will be managed by DCM, an investor in early stage technology companies based in Silicon Valley, Beijing and Tokyo. Anchor investors include GREE Inc., Japan’s largest mobile gaming social network, and KDDI Corporation, Japan’s second largest mobile operator. Funding and support will also come from strategic partner Tencent, one of China’s largest integrated Internet services companies. DCM plans to announce additional partners in the A-Fund, including a leading US based semiconductor company, in the coming weeks.

“The rise of Android is a rare and massive opportunity – one that comes only once in a major tech cycle,” said David Chao, co-founder and general partner, DCM. “The A-Fund will seek out the most promising companies enhancing and extending the rich open Android ecosystem—in mobile and beyond – including applications, services, and enabling technologies.”

The A-Fund will create a strong network of top-tier startups and provide access to resources, relationships and business opportunities catered to the needs of Android related companies.  DCM and its corporate partners will provide the capital, global business expertise, business development support, and other value-add services needed to succeed in a rapidly evolving market.

Suffice to say, given my prior blog coverage on Android, it should come as no surprise that I think Android represents potentially one of the largest opportunities ever for entrepreneurs, consumers, and investors, particularly in three categories:

  • Because Android is open source and available for a wide range of device manufacturers, it is becoming one of the fastest growing and most prolific platform plays ever, especially overseas where cash-strapped consumers and hardware guys are turning to Android devices. In the same way that iPhone enabled guys like Evernote, Rovio, and Ngmoco to build sizable businesses, Android’s wide and international reach will create large opportunities for entrepreneurial mobile software and service companies.
  • Android’s greater openness relative to other platforms provides the opportunity for new types of software and services to be deployed that more closed platforms will not be able to enjoy, at least not in the short-term. That translates into my belief that the next BMC/VMWare/Oracle/Symantec/Adobe of mobile will most likely first build on a more open platform like Android.
  • Android is not just a software play – its more open nature lets it function as a hardware enabler too: manufacturers of tablets, TVs, set-top boxes, printers, appliances, cars, medical devices, and even more can benefit from Android as a way to reduce costs/time-to-market or as a way to add application functionality/a consumer-friendly user interface to their design. In the same way that Android helped build HTC into a giant, Android will enable a new generation of hardware and software/applications to run on that new hardware, helping to build “the next HTC.”

So, if you or someone you know has a great Android-related project or idea that fits into any of the categories above, feel free to shoot an email to <first initial-last name (no hyphen in between)>-at-dcm-dot-com. 🙂

For more coverage on DCM’s Android Fund, check out: