Peter Kafka

Recent Posts by Peter Kafka

Still Pitching a Twitter Start-up to Investors? Good Luck….

You knew this already. But some of you like to see charts and numbers, so here you go: The funding boom for Twitter start-ups is over.

The numbers come from research firm CB Insights, which says that $10.4 million went into “pure play”  Twitter start-ups from June 2009 to May 2010. In the previous year, that number had been $21.6 million.

Graph, as promised:

Easy enough to blame this on last spring’s “hole-fillingtempest, but there’s a natural ebb and flow to VC funding trends, too. Or if you want to be less polite about it, you can say that VCs move in herds, just like every other group of humans.

Example: For a couple of years after Google’s YouTube deal, a ton of money flowed into other Web video sites. And then it stopped.

Meanwhile, if you’re a “pure play” Twitter start-up that wants to attract more funding–or just survive, period–you are most likely trying to turn yourself into something that doesn’t depend solely on Twitter. See: Tweetdeck’s effort to incorporate feeds from every social service under the sun–Facebook, Foursquare, the yet-to-be-announced Google (GOOG) thingy, etc. TweetPhoto is doing the same thing, and changed its name to “Plixi” to underscore the change.

That said, note that even CB Insight’s data doesn’t show demand for this stuff going away altogether–the volume of deals didn’t drop in the last year.

Which makes sense, because if Twitter figures out how to make money–real money–one day, it’s going to spread it around to its partners (it will ask them for money, too, of course). So why not bet on that? And I can think of at least one pure-play Twitter start-up that will probably land a decent chunk of dough in the next few months. More on that later….