Exclusive: IAC Hatches Hatch, A Technology Sandbox To Incubate Mobile Startups
IAC has made a business out of developing or acquiring mobile applications based on its popular properties. In fact, IAC’s mobile apps, which include apps for Match.com, CityGrid, UrbanSpoon, and Dictionary.com, have seen over 40 million downloads as of end of the year 2010. Today, we’ve learned exclusively that IAC is furthering its mobile strategy by launching Hatch Labs, a technology sandbox devoted to incubating mobile startups and innovations.
Hatch Labs is the brainchild of Dinesh Moorjani, who was formerly the SVP of IAC Mobile. At IAC, Moorjani started the mobile group in 2007 and helped lead all product strategy for mobile. During his time, Moorjani helped doubled mobile revenue annually for IAC. He tells us that for the past five years IAC has been acquiring mobile technologies and apps, but this can be an expensive endeavor. Moorjani and the company wanted to help incubate more innovation within IAC, particularly in the mobile sector and thus Hatch Labs was born.
The incubator, which is located in IAC’s New York office, is financially a joint venture between Xtreme Labs and IAC (financial terms have not been disclosed). Hatch Labs is bringing in talent to prototype and develop new applications, tools and platforms that tackle emerging problems in mobility. Moorjani, who serves as CEO of Hatch Labs, manages multiple teams of handpicked engineers and entrepreneurs, who work on developing mobile applications.
Moorjani says that three ideas/products are being incubated a any given time, and expects five businesses to be spawned from Hatch by the end of 2011. The most promising ventures, which will ranged from consumer facing to B2B apps, will seek additional capital from IAC and outside investors, to further grow the businesses, and could even be fully acquired by IAC.
In terms of equity and initial seed funding, Moorjani declined to give us specifics but says it is competitive and similar to the equity arrangements with other startup incubators, such as TechStars and Y Combinator.
Of course, recruiting talent is key to the success of Hatch Labs and its businesses and Moorjani is using equity incentives to attract talent that not only has experience in the mobile industry, but also has developed and sold busineeses previously. For example, Hatch’s first general manager to run one of its initial businesses is BumpTop co-founder, Nina Sodhi. BumpTop was acquired by Google last year.
Details on Hatch’s first product Blu Trumpet, which is expected to launch in Q2 this year, are limited but Moorjani says that it is a monetization and distribution platform in mobile, that aims to help publishers make money off apps and provides a distribution portal for advertisers. Another business being developed within Hatch involves group texting, but Moorjani declined to reveal any further details.
Housing an incubator within a large company has its advantages and drawbacks. First, the incubator will need to be free of any corporate regulations, mentalities and rules for innovations to flow freely. While this sounds simple, it can be tough. Of course, IAC has tons of cash to put into these ideas, which is an added bonus. It should be interesting to see the quality of products that hatch from Hatch Labs.