May 25, 2010

Mayor Bloomberg and FirstMark Capital Announce First Investment of the New York City Entrepreneurial Fund

City and Private Sector Firm to Invest in NYC BigApps Winner – MyCityWay – Through First Seed Fund of Its Kind Outside Silicon Valley

Up to $22 Million Available for New York City-Based Technology Startup Companies to Help Spur Entrepreneurship and Create Jobs in the City

Mayor Michael R. Bloomberg and FirstMark Capital today announced the first investment of the NYC Entrepreneurial Fund. MyCityWay, a mobile application provider and the developer of NYCWay – one of the winning applications of the City’s inaugural NYC BigApps competition in February 2010 – is the fund’s first seeded company. The City created the $22 million fund – the first of its kind outside Silicon Valley – to be managed by FirstMark Capital to provide promising New York City-based technology startup companies with early-stage capital. New York City Economic Development Corporation contributed $3 million to establish the fund, and FirstMark Capital, a leading New York City-based venture capital firm, will contribute up to an additional $19 million. Mayor Bloomberg made the announcement at the TechCrunch Disrupt conference in Lower Manhattan, where he was joined by FirstMark Capital CEO and Managing Director Lawrence D. Lenihan, New York City Economic Development Corporation President Seth W. Pinsky, and MyCityWay Co-Founders Puneet Mehta, Archana Patchirajan, and Sonpreet Bhatia.

“We’ve long said that New York City is a breeding ground for new and innovative companies and there’s no better place for them to succeed than here. Now we’re putting our money where our mouth is,” said Mayor Bloomberg. “To spur entrepreneurship in New York City, we’re already providing start-ups with specialized training, physical space and tax breaks, and now we’re adding capital investments to go along with it. We expected our anchor contribution of $3 million to solicit roughly $9 million from the private sector, but FirstMark Capital is putting in more than double that, a great sign both for the success of our initiative and for the growth prospects of investment-worthy start-ups in the City.”

“For 14 years, FirstMark Capital has been instrumental in attracting and encouraging great companies to build and operate their companies in New York City,” said FirstMark Capital CEO Lawrence Lenihan. “As the business capital of the world, we believe New York City offers entrepreneurs a resource ecosystem like no other city can, and is an ideal location for visionary entrepreneurs to start industry-changing businesses. We are proud to partner with Mayor Bloomberg and New York City Economic Development Corporation in this exciting endeavor, and will work tirelessly to provide NYC Entrepreneurial Fund participants with the strategic support, guidance and relationships to build successful, market-leading businesses from their headquarters in New York.”

MyCityWay will receive $300,000 in initial funding under the program, allowing it to move its offices from Jersey City, New Jersey to Manhattan; expand its staff by an additional two employees; extend its applications to new markets; and make the applications available to new mobile devices. Since developing NYCWay, the company has added applications for cities including: Boston, Las Vegas, Los Angeles, San Francisco, Washington, D.C. and London. NYCWay, originally developed for the iPhone, is now also available on Android and iPad. In New York City, it has generated more than 200,000 downloads per month since its launch. The application aggregates more than 50 New York City-centric resources including traffic updates, restaurant inspection results, and WiFi locations into a single, bundled application.  It also acts as an information bridge between people, local businesses and government. The MyCityWay applications can be downloaded from: www.mycityway.com.

“There is significant venture capital available in New York City, but funding for startups in the earliest stages of development is often extremely hard to come by,” said Deputy Mayor for Economic Development Robert C. Lieber. “We created the NYC Entrepreneurial Fund to help bridge that gap.”

“New York City’s startup community regularly develops new and innovative technologies, but in the past, access to the funding necessary to commercialize those technologies has been lacking,” said New York City Economic Development Corporation President Pinsky. “By providing City-based startups with a new source of seed-stage funding, we will enable more entrepreneurs to launch and grow their businesses here. This new source of financing, coupled with our efforts to provide low-cost space and networking support to entrepreneurs, will lay the groundwork for a whole new generation of great New York City-based businesses.”

“We're proud to have been instrumental in launching the NYC BigApps competition and delighted to see one of the participants turn its innovative efforts into a career opportunity,” said Department of Information technology and Telecommunications (DoITT) Commissioner Carole Post. “We'll continue to work with the Economic Development Corporation and other City partners to foster technology start-up opportunities, further cultivating a fresh approach to the intersection of government, new technology, and economic development.”

“New York City is the ideal place to build our business,” said MyCityWay Co-founder Puneet Mehta. “By taking advantage of programs like the BigApps Competition and the NYC Entrepreneurial Fund, MyCityWay has been able to capture significant market visibility and achieve rapid growth in a very short time period.  As an integral figure in the New York City investment and entrepreneurial community, FirstMark Capital and its seasoned team of professionals will help us tap into the City’s world-class resources and ensure the lasting success of MyCityWay.”

“The NYC Entrepreneurial Fund is one more example of how Mayor Bloomberg, who is the city’s premiere entrepreneurial success story, is working to make sure the city is a place where start-up businesses get all the support they need to create new jobs and contribute to our economic growth,” said Partnership for New York City President and CEO Kathryn Wylde.

The NYC Entrepreneurial Fund was established with $3 million of capital from New York City Economic Development Corporation. It will invest in early-stage and potential follow-on investments with FirstMark Capital, which will contribute up to an additional $19 million. FirstMark Capital will provide the industry insight, proprietary relationships and operational expertise needed to ensure the seeded companies reach their ultimate potential. It will be responsible for sourcing and evaluating potential investments, negotiating terms and conditions, and closing each seed investment; it will monitor the performance of the companies in which its funds and the NYC Entrepreneurial Fund are invested; and it will actively work with other leading venture firms and seed investors in New York City to co-invest in these opportunities. Interested companies and entrepreneurs can apply online at http://www.firstmarkcap.com/firststeps.  

The NYC Entrepreneurial Fund is one of a series of City-sponsored programs launched by the Bloomberg Administration to support entrepreneurship and encourage start-up companies to locate and grow in New York City. The City has announced five business incubators, with two more expected to launch by the end of 2010. In addition, the City has established JumpStart and FastTrac training programs to help emerging entrepreneurs start new businesses, grow their businesses, or transition to new sectors; launched the NYC Next Idea global business plan competition; and worked to eliminate the Unincorporated Business Tax, reducing the liability for partnerships and sole proprietors for more than 17,000 New York City-based small businesses.

Contact:

Stu Loeser/Andrew Brent            (212) 788-2958
David Lombino/Libby Langsdorf (NYCEDC)    (212) 312-3523
April Harned (FirstMark Capital)         (212) 255-0080 ext. 23