[Posted on March 3, 2008 - 5:13 PM]
Two years after investing less than $5 million in browser-based file sharing startup, AllPeers, Index Ventures and Mangrove Capital Partners appear to be taking a loss on the deal. AllPeers said today it was shutting down.
A few years before investing in AllPeers, the two European venture capital firms came together to back superstar startup, Skype, which was acquired by eBay in 2005 for more than $2.6 billion. Index and Mangrove had hoped AllPeers would yield similar results. Here are their statements at the time of their investment into AllPeers in March 2006:
Mark Tluszcz, managing partner of Mangrove, said that he was immediately struck by the similarities between AllPeers and Skype at the time of their initial investment. "Both companies have looked beyond the misleading stigma attached to P2P to find new, innovative and highly appealing ways to help people share and communicate."
Adds Neil Rimer, general partner at Index, "We think AllPeers has true viral potential because it allows people to share any type of media privately with their friends and this is something people already do a lot using other less intuitive methods."
Comparing a newbie to one of the most successful venture capital investments in history is dangerous and will almost always end up looking reckless later. That said, with the gains earned from Skype, Mangrove and Index have earned themselves the right to fail many more times. - Joshua Jaffe
Joshua Jaffe is general manager of TechConfidential.com.