Google better watch out.
A brand new mobile operating system-maker just took big investment from some serious investors.
Silicon Valley venture capital firm Andreessen Horowitz, Chinese Internet company Tencent, and existing investors are putting another $23 million into a startup called Cyanogen.
Cyanogen makes a mobile operating system called CyanogenMOD.
CyanogenMOD is basically an enhanced version of Google's mobile operating system, Android.
Cyanogen can improve on Android and sell the result as new software because Android is what's called "open source" software. Google made it open source so that the mobile Web would become more widepread. (The trick has worked.)
In a blog post explaining why he invested, Andreessen Horowitz partner Peter Levine wrote, "CM takes the best of what Android offers and adds innovative features to create a clean yet customizable user experience."
"CM is 100% compatible with all Android applications, yet brings fabulous new capabilities to Android such as enhanced security, performance, device support, and personalization."
"Today, tens of millions of devices are running Cyanogen worldwide, and we believe that CM has the opportunity to become one of the world's largest mobile operating systems. As past history suggests, companies such as Microsoft and RedHat have done exceedingly well by being independent of hardware, and we believe that this trend will accelerate in the mobile world."
Cyanogen plans to use the $23 million to hire 70 more people and open an office in Shenzhen, the Chinese city where Tencent is based.
This news has to make Google wary. Ever since it backed its search business out of China over hacking accusations several years ago, it's main exposure to the Chinese consumer has been through Android.
Now, one of China's biggest Internet company's is investing millions of dollars to move a new OS-maker into its home town. That could mean we'll see a Cyanogen-built mobile OS from Tencent in the coming years. Tencent's biggest Chiense rival, Alibaba, is already selling phones with its own forked-version of Android built-in.
For now, forked versions of Android still help Google in that they bring users onto the Web, which is best navigated by Google Search. But forked versions of Android also divert consumers into other monetization streams that Google would love to capture – particularly payments.
Cyanogen is a very new company. For four years, it was a side project of cofounder Steve Kondik, a Samsung mobile engineer. Then, last Spring, Kondik quit Samsung. He raised money from venture firms Redpoint and Benchmark to turn the project into a company.
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