Bloomberg L.P., parent of Bloomberg News, reported today that the company is about to start doing much more than writing about technology and new business: they are going to invest in it.
Bloomberg announced the formation of the company's own venture capital fund, Bloomberg Beta, of $75 million. Roy Bahat, who formerly ran a media company owned by News Corporation named IGN Entertainment, will move into the head role at Bloomberg Beta. The fund will be headquartered in Bloomberg's current San Francisco offices, while the East Coast branch will be located in the company's New York City offices under the direction of Karin Klein, head of Bloomberg's new initiatives, and James Cham, previously of Trinity Ventures in California. The new fund, Bloomberg Beta, has already begun offering financial support to young start-ups located in the heart of Manhattan, like Errplane, a tracking application to measure performance, errors, and metrics, and Nodejitsu, a cloud computing provider.
But this isn't Bloomberg L.P.'s first time dabbling in start up investments. The company has provided funding to technology companies in the past as a limited partner with Andreessen Horowitz, a venture capital firm that holds claims in big name social media companies like Twitter and Facebook.
But the company's move into a role in which the company can profit from its investments in start ups places Bloomberg News in a tenuous situation and throws the media company's credibility into question. Bloomberg News reporters could potentially be under fire from alleged complaints of accuracy, favoritism, and self-interest. Bahat, said that the fund has been organized into an independent legal entity in anticipation of such fears, according to The New York Times.
Interestingly, Bloomberg L.P. is just one of multiple journalistic companies to move in to the venture capitalist sphere. The New York Times Company publicly discloses its investments online and notes its potential stakes in relevant articles.
As the field of journalism declines and the technology and media industries continue to expand, Bloomberg L.P.'s move seems to be an interesting experiment in staking claims in innovation.
Boston start ups, get your pitches ready. You've got a new and friendly venture capitalist neighbor in this New York City fund.
