In spite of all the excitement around the App Store “gold rush”, investors have been wary of backing companies on the basis of a single mobile application.
“Historically, VC investment into mobile apps has been a black hole,” one London venture capitalist told me earlier last year – great for small teams of developers but hardly the basis of a lasting company.
Which makes it all the more interesting that Amadeus Capital Partners and Eden Ventures have just put £1m ($1.6m) into Ambient Industries, maker of location-based iPhone app Flook.
Ambient pitched dozens of US investors without success but secured backing from two of the first three London firms it met.
Amadeus – best known for bigger bets such as CSR, the Bluetooth chip maker, and Plastic Logic, maker of the Que flexible e-reader – has invested through its seed fund. “This is a unique way of addressing this market that no-one else is going after and the team have a good background,” says Amadeus’ Will Dawson.
Ambient’s Roger Nolan and Jane Sales previously worked at Psion developing the code base which eventually became Symbian, the mobile-phone operating system which runs on millions of Nokia phones.
Mr Nolan describes Flook as “digital graffiti” (and was called something like that until Ambient discovered that nobody could spell graffiti). It lets users leave virtual “cards” (think Post-It notes) tagged to a specific location, which show up when the app is launched nearby. From the FT’s offices in London, these include tips for local bars and galleries, the view from a high office block, and a recommendation for the tucked-away Operating Theatre Museum.
Flicking through the cards is more like reading a magazine than the other location-based services being hyped right now, such as Foursquare, Gowalla and (with a new check-in feature) Yelp. Foursquare, which is also investigating raising new funds, awards “digital candy” – badges and mayorships – for frequent check-ins.
“I think those games offer a very shallow experience,” says Mr Nolan, who works between Henley-on-Thames and San Francisco. “You don’t look at Foursquare for a long time – you check in and you’re done.” After using Foursquare or Yelp to search for a good spot for pizza, Mr Nolan hopes that iPhone owners will then fire up Flook for something a bit more serendipitous.
That will eventually include ads from local businesses, but for now Flook is focused on bringing in content from bloggers, photographers documenting local features (such as vintage shop fronts or wall paintings) and other semi-pro contributors who are happy to share their work to raise their profile. Local news is also planned.
Mr Nolan claims that Flook’s thousands of users tend to use it for more than 10 minutes at a time, high for an iPhone app. That sort of attention could make it appealing for advertisers.
Using it around London, it currently suffers a bit from paucity of quality cards (it only launched in December). But the full-screen interface is appealing – big pictures, clear text and fewer pins in maps than other location apps. The micro-guidebook idea is easier to grasp and perhaps longer-lasting than a contest for digital candy.
By pitching itself as a media platform, not just another location-based game, maybe Flook can prove those sceptical investors wrong.
