Twitter Ventures has made its debut investment in the start-up Cyanogen. With its venture capital arm, Twitter will be able to take advantage of the new technologies with great potential.
Why Twitter acquired Cyanogen?
Cyanogen is a start-up that was founded in 2009, and it recently raised $80 million from several investors including Twitter. Cyanogen is developing a new OS to give competition to the existing mobile operating systems..
According to Vivian Lee, VP of marketing and communications for Cyanogen, the reason why Twitter choose Cyanogen as the first company to invest in is similarity in goals, mutual contacts in the investor community, and the fact that two businesses are headquartered nearby.
“We’re right by Twitter,” Lee said. “It was very easy to facilitate these conversations.”
Twitter Ventures was formed in mid-2014, with CFO Mike Gupta announced as the head of the strategic investments. The companies have been in talks for over several months.
Twitter has not commented officially on the investment activity of its VC arm. Citing a source, a report from Mashable informs that the VR arm is operating with a small share of company’s overall capital. The main objective of the VC arm is to provide strong backing to the businesses that are of interest to execs, and can prove beneficial to Twitter strategically.
Will Twitter acquire Cyanogen?
It’s been a trend among tech companies recently to create with venture funds. Google, IBM and Intel have all been running venture funds for some time now. For Google, an investment in any company could hint at a possible acquisitions, like with Nest, the smart thermostat business.
There are also rumors that Twitter has invested in Cyanogen to snap it up at a later date. The company was not quick in adding features to its platform, but to make up for the loss and to introduce new features, the micro-blogging company has been turning to acquisitions, and Cyanogen could be a potential target. According to Brian Blau, an analyst with Gartner, the investment could give Twitter a leg up in the OS market, and possibly get a strong foothold due to their distinctive and engaged user base.