An Aliso Viejo startup that recently inked a $67 million venture funding deal has packed up for Los Angeles.
Amp’d Mobile Inc., which aims to bring music and videos to 18- to 35-year-old cell phone users, moved to Los Angeles earlier this month to be closer to the region’s entertainment hub, founder Peter Adderton said.
Adderton, who founded Irvine-based Boost Mobile LLC in 2000, said he would have liked to keep Amp’d in Orange County.
“When it comes to hiring your young media types, they all live up in Los Angeles,it was hard to get them to commute into Orange County,” said Adderton, who said he will continue to live in Newport Coast.
The company, which has 70 workers and was launched about a year ago, plans to start selling cell phones and service in the winter.
The Amp’d Web site features short videos with names like “Ultimate cat fight,” “BMX meets concrete” and “Beer, beer, beer, beer.”
During the summer, Amp’d raised $60 million in equity funding and about $7 million in loans to help fund marketing efforts, among other things.
The funding is one of the largest in recent history for any Southern California company,and big by historical standards.
During the tech boom in the late 1990s, the median venture capital round in the U.S. barely topped $14 million, according to the MoneyTree Survey by Price-waterhouseCoopers, Thomson Economics and the National Venture Capital Association. The median value of a recent venture funding deal is about $8 million.
Part of the Amp’d funding came from Universal Music Group, a unit of France’s Vivendi Universal SA, which counts Gwen Stefani, The Killers and Eminem among its roster of musicians.
Funding also came from three venture capital investors: Highland Capital Partners of Lexington, Mass., Columbia Capital of Alexandria, Va., and Menlo Park-based Redpoint Ventures.
The company is looking to raise another $50 million to $100 million. Adderton’s goal is to build a company in the cell phone industry that targets youth culture.
“The phone in itself is the first mobile media device,” Adderton said. “We think like a media company.”
Amp’d is going after people aged 18 to 35,early technology adopters, Adderton said.
The company plans to offer phones that provide music and scores of quirky and edgy video clips of movie trailers or home-video college pranks.
The company also is building a studio at its new site that will feature live band performances that can be accessed instantly across its mobile networks.
He plans to exploit the new “3G” cellular networks that are speedy enough to deliver music and video via cell phones.
These kinds of features are popular around the world, but have seen slower acceptance in the U.S.
Taking a page from hip apparel makers, Amp’d has signed up a stable of team riders, or spokespeople.
The company’s riders include surfer Andy Irons, skateboarder Paul Rodriguez, snowboarder Travis Rice and motocross rider Jeremy McGrath.
Targeting the youth market is familiar ground for Adderton.
Boost Mobile targets young cell phone users with slick advertising and sponsorships of youth-oriented events. The company was bought by what now is Sprint Nextel Corp. in 2003. Adderton stepped down as Boost Mobile’s chief executive after the deal closed.
Adderton declined to say how much money he got from the deal, but he did say it was enough to live in Newport’s Pelican Crest neighborhood and take a “helicopter to work everyday.”
Adderton said he doesn’t want to sell Amp’d to a big wireless phone operator like he did with Boost Mobile. Amp’d could go public in a few years, he said.
Initial funding for Amp’d came from his share of the Boost Mobile sale and from Angel investors.
Amp’d is part of a trend in the maturing cell phone industry to target specific groups.
Burbank-based Walt Disney Co. and its ESPN Inc. unit have said they are looking to launch a wireless company featuring content tailored to sports and entertainment fans.
“There really aren’t many growth opportunities left,” said Linda Barrabee, senior analyst with the Yankee Group in Boston. “What it’s really about is segmentation and retention.”
These specialty companies can sell phone service by paying fees to major carriers that operate existing cell phone networks, such as Sprint Nextel.
They are generally referred to as “mobile virtual network operators,” and are expected to grow from 12 million users in the U.S. to about 29 million uses in 2010, said Marina Amoroso, another analyst at the Yankee Group.
It won’t necessarily be easy for Amp’d. The market is crowded with wireless service competitors that have better known names, Barrabee said.
“I think it’s early,” Barrabee said. “They have to stay focused.”
