July 21 (Bloomberg) -- Kleiner Perkins Caufield & Byers and Sequoia Capital, the venture firms that made billions of dollars backing Google Inc., are investing $30 million in Jive Software Inc., a maker of social-networking technology for businesses.
Kleiner Perkins partner Ted Schlein is also joining the startup’s board, Palo Alto, California-based Jive said today in a statement. Jim Goetz, a partner at Sequoia, has been a director since it first invested in Jive in 2007.
The firms are backing a nine-year-old company that Jive Chief Executive Officer Tony Zingale says may file for an initial public offering as early as next year. Its social-networking software is used by more than 3,000 businesses, including Intel Corp., Nike Inc. and VMware Inc., to help employees communicate with one another and with customers. Companies pay annual fees of about $100 per user for the software, which includes the costs of hosting the service.
“We’re now at a tipping point where people are looking at social as something that ought to be mainstream in the enterprise,” Goetz said in an interview. Jive is “right in the middle of a wonderful tailwind.”
Kleiner Perkins and Sequoia, both founded in 1972 and located about a mile apart in Menlo Park, California, are two of the world’s largest venture firms. In 1999, they bought a combined $25 million stake in Google, five years before the search engine sold shares to the public. The company is now valued at more than $150 billion.
“We have the two venture titans of Silicon Valley on our board,” said Zingale, who took the CEO job this year. He previously ran Mercury Interactive, a software maker bought by Hewlett-Packard Co. for $4.5 billion in 2006. “They have a long track record of significant investments.”
Including today’s deal, Jive has raised $57 million in three rounds of funding. The previous $27 million all came from Sequoia. Jive’s revenue jumped 85 percent last year, and in the past 12 months, its workforce has more than doubled to 275 employees, Zingale said.
Venture capital rebounded in the second quarter after tumbling 35 percent in 2009, according to data from the National Venture Capital Association. Firms invested $6.52 billion in the U.S. in the period, a 53 percent increase from a year earlier and the most since the third quarter of 2008, the NVCA said last week.
In addition to investing in Mountain View, California-based Google, Kleiner Perkins and Sequoia jointly backed video-game maker Electronic Arts Inc., security-software company Symantec Corp. and chipmaker Cypress Semiconductor Corp.
“We try and be very selective about it when we do get together,” Schlein said.
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