It seems that every internet company and their dog have at least one venture capital (VC) arm under their wing, with the likes of GV (formerly Google Ventures), M12 (formerly Microsoft Ventures), Salesforce Ventures, Twilio Ventures and Zoom Ventures all serving their corporate namesakes potential cash cows via hundreds of equity investments.
Today, it's Mozilla's turn to solidify its investment endeavors via a new $35 million VC fund targeted at early-stage startups. Formally announced at Web Summit in Portugal today, Mozilla Ventures builds on other recent investments the company has made as part of its Mozilla Builders startup incubator program, though in truth Mozilla has sporadically invested in nearly 20 companies over the past decade.
More recently, Mozilla joined a $900,000 pre-seed funding round into password management startup Heylogin. While Heylogin confirmed Mozilla as an investor back in September, we now know that this represented one of the first three investments that Mozilla made from its new fund. The other two include Block Party, which raised a $4.8 million seed round in September to combat online harassment, and Secure AI Labs, which is reportedly in the process of raising $9 million for a product that fosters collaboration in the medical industry while safeguarding aggregated patient data.
While it's not disclosing exactly how much it's plowing into these companies, the triumvirate of investments gives some idea as to what Mozilla Ventures is aiming for with the new fund. It's focusing on seed to Series A-stage startups, but more specifically it says that it's targeting what it calls "responsible" tech companies that "push the internet and the tech industry in a better direction."
But first, let's take a quick step back and look at how we arrived at "Mozilla the VC," from a brand that is still pretty much best known for its web browser.
The story so far
The Mozilla "community" emerged from Netscape back in 1998, and today it constitutes a not-for-profit entity called the Mozilla Foundation and a for-profit subsidiary called the Mozilla Corporation.
Mozilla's open source Firefox emerged as a major player in the web browsing space, taking on the (then) mighty Internet Explorer and hitting the giddy heights of a circa-30% market share around 2010. In the intervening years, it has dwindled to around 4% market share, though this still places it in the top three browsers behind Chrome and Safari.
Today, Mozilla is a vocal proponent of privacy and positions itself as the antithesis of Big Tech behemoths such as Google, even though it relies substantively on the internet giant for revenue. It has also introduced a bunch of new privacy products in recent years, including a virtual private network (VPN) and an email-masking service. It has dabbled in other projects too, such as the now-defunct operating system Firefox OS. But with the Firefox web browser recently hitting version 100, it's clear that Mozilla is still heavily reliant on its browser for income. The organization makes around $500 million annually, the lion's share arriving via a search engine partnership with Google. Other sources of cash include subscriptions (VPN and email-masking), advertising and donations from the public.
This all takes us to today, with Mozilla now looking to extend its rake into the world of venture capital. The new fund is being spearheaded by managing partner Mohamed Nanabhay, a South Africa-based technology and media executive and investor, who also served as a Mozilla board member until August this year.
"People before profits"
Mozilla Ventures is keen to set itself apart from the pack by stressing its focus on "putting people before profits." In truth, there are plenty of VC funds that can easily lay claim to a similar mission, whether it's through investing purely in climate tech or other companies working in the environmental-social-governance (ESG) realm. Mozilla, however, is addressing slightly different areas of the technological spectrum, such as privacy; "trustworthy AI"; and products that ultimately help decentralize digital power, which could be code for web3.
"There are a lot of funds focused on ethical investing in areas like climate and economic justice," Mozilla Foundation executive director Mark Surman explained to TechCrunch. "We’ve taken a lot of inspiration from funds like these. As far as we know, Mozilla Ventures is the first focused solely on responsible internet startups. And, while some other funds do have investments in this area, the startups we met through Mozilla Builders told us that much is needed here."
Mozilla's experimental Builders incubator program was a short-lived initiative that pretty much started and ended in 2020, though Mozilla said it culminated in more than 80 small investments.
"The Builders experiment made it clear that there are founders and teams out there hungry to ‘fix the internet,' but they need support," Surman said. "Earlier this year, we decided that Mozilla needs to make a sustained commitment to supporting people and projects like the ones we met through Builders. Mozilla Ventures is our first step in this direction."
It's also worth noting that the initial $35 million fund is being provided entirely by the Mozilla Foundation for now, whose funds come from sources that include donations from the public -- many of whom may donate purely to support their favorite web browser. However, Firefox is technically maintained by the Mozilla Corporation, with Surman stating that all the money the Mozilla Foundation receives from donations is put entirely to fund its advocacy and philanthropy efforts, including its Privacy Not Included guide and grants given to professors that teach about responsible technology programs.
"Mozilla Ventures is being funded from Mozilla’s long-term savings," Surman said. "In simple terms, we are moving funds from our existing investment accounts into an investment vehicle focused on companies whose mission is in line with Mozilla."
Nanabhay will be the only full-time member working on Mozilla Ventures at first, supported by a team of consultants in London, Boston and San Francisco, but the process is currently underway to recruit more heads in the U.S. and Europe to bolster the fund's investment ambitions.
"We want to support founders who are working on the many challenges we face online -- from misinformation to censorship, security to privacy, and the ability to harm instantaneously and at scale," Nanabhay said in a statement issued to the media ahead of today's announcement. "These issues are too important to leave to any one institution to solve."
Surman added that Mozilla Ventures is conversing with potential co-investors, which could see the fund grow both in terms of dollars and industrial expertise.
"We will be announcing further updates and progress on the fund in early 2023, including further investments and potential partners," Surman said.