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VENTURE CAPITAL IN MOBILE

VIEWS: 8 PAGES: 18

									VENTURE CAPITAL IN MOBILE
                                    2011 Review



                 Rajeev Chand
                Managing Director
                Head of Research

                January 20, 2012
VC in Mobile—$6.3 Billion in 2011

                                                             VC Investments in Mobile
                                                                   Global, 2001-2011
 Amount ($B)
        7.0
                                                                               $6.4
                                                                                                     Carrier             $6.3
                                                                                                     Technology
        6.0
                                                                   $5.4
                                                                                       $5.1
                   $4.9
        5.0
                                                                                                                  $4.5

                                                            $4.0
        4.0                                                                                   $3.6

                                 $3.1
        3.0                                   $2.6
                                                                                                          $2.1
        2.0


        1.0



        0.0
                  2001          2002          2003          2004   2005    2006        2007   2008        2009    2010   2011
 Source: Rutberg & Company
 Note:   Excludes debt financings for venture-backed companies

                                                                           1
VC in Mobile—42% of Overall VC

                                         Mobile VC as Percentage of Overall Tech VC(1)
                                                                                 2001-2011
 Percent of Overall VC
     45%                                                                                                                                                        42.4%

     40%


     35%
                                                                                         30.4%                                               30.4%
     30%                                                                                               28.4%
                                                                          27.6%
                                                            26.3%

     25%

                               18.9%       18.7%                                                                       18.2%
     20%                                                                                                                        17.1%
                 13.8%
     15%


     10%


       5%


       0%
                 2001           2002          2003           2004          2005          2006           2007          2008          2009           2010          2011
Source: Rutberg & Company
(1)     Overall tech VC based NVCA data (includes computer and peripheral, IT service, networking and equipment, semiconductor, and software sectors; excludes carrier sector)

                                                                                        2
VC in Mobile—Context of Public Companies

                          Mobile VC Investments vs. Tech Companies’ R&D Expenditures(1)
                                                                                                           2011
 Amount ($B)
    10.0

      9.0

      8.0

      7.0

      6.0

      5.0

      4.0

      3.0

      2.0

      1.0

      0.0
              Microsoft

                          Samsung




                                            Nokia




                                                                                                                                                  NTT
                                    Intel




                                                                              Hitachi




                                                                                                                                                        HP




                                                                                                                                                                        SAP
                                                                IBM

                                                                      Cisco




                                                                                        Toshiba

                                                                                                  Google

                                                                                                                Ericsson

                                                                                                                           Oracle

                                                                                                                                    Canon




                                                                                                                                                             Qualcomm




                                                                                                                                                                              Apple

                                                                                                                                                                                      STMicro

                                                                                                                                                                                                FUJIFILM
                                                    Mobile VC




                                                                                                                                            ALU




Source: Rutberg & Company
(1)     Public companies’ R&D expenditures as reported for last twelve month period

                                                                                                            3
VC in Mobile—By Sector

                                         Mobile VC Investments by Sector
                                                              Global, 2011



                                                       Semiconductor
                                                           $0.4B
                                             Carrier
   CE Device         $608MM                  $0.5B
   Component         $307MM
   Software           $62MM                                                      Infrastructure
                                                                                      $2.6B
                                    Device
                                    $1.0B
                                                                                                  Media        $936MM
                                                                                                  Telecom      $922MM
                                                                                                  Enterprise   $762MM




                                             Application
       Consumer        $1,328MM
                                               $1.8B
       Telecom              $90MM
       Enterprise       $374MM
                                                           2011 = $6.3 billion
Source: Rutberg & Company

                                                                   4
VC in Mobile—By Sector over Time

                                 Percent of Mobile VC Dollars by Sector over Time
                                                             Global, 2005-2011

 % Total        Consumer Application            % Total         Telecom Application            % Total        Enterprise Application
  25%                                            10%                                            8%
  20%                                             8%                                            6%
  15%                                             6%
                                                                                                4%
  10%                                             4%
   5%                                             2%                                            2%

   0%                                             0%                                            0%
           2005 2006 2007 2008 2009 2010 2011             2005 2006 2007 2008 2009 2010 2011          2005 2006 2007 2008 2009 2010 2011


 % Total         Media Infrastructure           % Total        Telecom Infrastructure          % Total       Enterprise Infrastructure
  20%                                            30%                                            20%

  15%                                                                                           15%
                                                 20%
  10%                                                                                           10%
                                                 10%
   5%                                                                                            5%

   0%                                             0%                                             0%
           2005 2006 2007 2008 2009 2010 2011             2005 2006 2007 2008 2009 2010 2011             2005 2006 2007 2008 2009 2010 2011


 % Total                Device                  % Total                Carrier                 % Total           Semiconductor
  20%                                            40%                                            20%

  15%                                            30%                                            15%

  10%                                            20%                                            10%

   5%                                            10%                                             5%

   0%                                             0%                                             0%
           2005 2006 2007 2008 2009 2010 2011             2005 2006 2007 2008 2009 2010 2011             2005 2006 2007 2008 2009 2010 2011

Source: Rutberg & Company

                                                                        5
VC in Mobile—2011 Cluster Map
       Mobile
     Advertising
                                     Enterprise
                                     Solutions




Mobile
Video




                                                            Commerce and
                        Mobile                                Payments
                        Games


                                                  mHealth

                       Social
                       Apps
  Source: Rutberg & Company

                                 6
VC in Mobile—Marketing & Advertising

                            VC Investments in Mobile Marketing & Advertising
                                                Global, 2005-2011
 Amount ($MM)
     700


                                                                                  $592
     600


     500


     400


     300


     200                                 $161
                                                                    $138   $128
                                                        $115
                               $92
     100
                    $29

        0
                   2005        2006      2007           2008        2009   2010   2011

Source: Rutberg & Company

                                                        7
VC in Mobile—Health

                                   VC Investments in Mobile Health
                                               Global, 2005-2011
 Amount ($MM)
     400
                                                                                 $356
     350


     300


     250
                                                                          $209
     200                                $183


     150


     100


       50                   $31                                    $25
                    $19
                                                           $9
        0
                   2005     2006        2007           2008        2009   2010   2011

Source: Rutberg & Company

                                                       8
VC in Mobile—Commerce & Payments

                            VC Investments in Mobile Commerce & Payments
                                               Global, 2005-2011
 Amount ($MM)
     600
                                                                                 $558


     500



     400



     300                                                                  $276



     200
                                        $134

                    $88        $87                         $79     $85
     100



        0
                   2005       2006      2007           2008        2009   2010   2011

Source: Rutberg & Company

                                                       9
VC in Mobile—Selected Private Company Announcements in 2011



                                                                                                              83MM monthly
        $11MM in                                                                             10MM monthly     users, $200MM
                                       15MM users,                      16MM users,           active users,
        payments                                                                                                raised from
                                       1B messages                      1B recordings       50MM downloads
     processed daily                                                                                             SoftBank
                                          per day




                                                                                              600% YoY        30MM active
                                       $160MM raised                        3.5MM              growth in      users in just
     2.5MM active
                                       in 2011, valued                    downloads,        customers, 435     over 1 year
     users, 700MM
                                        at over $1.5B                   550MM flips per     new enterprise
     product views
                                                                            month            customers in
                                                                                               Q42011



                                                                                                              70MM monthly
                                                                                                               active users,
    130MM monthly                                                                                                 250MM
                                       15MM users,                       15MM users,           15MM users
  active users, 30MM                                                                                            downloads,
                                      200MM photos                      half of which are
   daily active users,                                                                                        20MM monthly
                                                                          outside U.S.
  500MM downloads                                                                                               downloads


Source: Rutberg & Company, company press releases and publicly disclosed statements

                                                                                      10
VC in Mobile—By Round Size

              VC in Mobile by Round Size(1)                                              Selected Early Stage Investments
                                    2005-2011                                                            2011
 % of Deals
    100%

      90%

      80%

      70%

      60%

      50%

      40%

      30%
                                                               >$20MM
      20%                                                      $10-$20MM
                                                               $5-$10MM
      10%                                                      <=$5MM             (Acquired by Google)


       0%
               2005      2006      2007     2008        2009   2010   2011
Source: Rutberg & Company
(1)     Excludes deals where amount was not disclosed

                                                                             11
VC in Mobile—Largest Financings

                                                       Top 25 VC Financings in Mobile
                                                                                    2011
                                                                                                                                                               Amount
 Rank        Company                    Location                          Sector                   Subsector                                    Date            ($MM)

     1       LightSquared               Reston, VA                        Carrier                  Wholesale operator                           7/5/2011         265.0
     2       InMobi                     San Mateo, CA                     Infrastructure           Mobile advertising                          9/15/2011         200.0
     3       Plastic Logic              Cambridge, UK                     Device                   Display                                     1/18/2011         200.0
     4       Jawbone(1)                 San Francisco, CA                 Device                   Consumer electronics                       12/21/2011         159.0
     5       Eaton Towers               London, UK                        Infrastructure           Tower                                       9/19/2011         150.0
     6       O3b Networks               St. John, UK                      Carrier                  Satellite                                  11/17/2011         137.0
     7       Square(1)                  San Francisco, CA                 Infrastructure           Mobile payment platform                     11/8/2011         130.5
     8       Tabula                     Santa Clara, CA                   Semiconductor            Programmable logic                          3/28/2011         108.0
     9       Xiaomi                     Beijing, China                    Device                   Handset                                    12/20/2011          90.0
    10       DriveCam                   San Diego, CA                     Infrastructure           Fleet management                           11/23/2011          85.0
    11       Telecon Group              Montréal, Canada                  Infrastructure           Network engineering                        12/21/2011          60.0
    12       Tango(1)                   Palo Alto, CA                     Application              Video calling                               7/20/2011          50.7
    13       Evernote                   Mountain View, CA                 Application              Notes application                           7/13/2011          50.0
    14       Flipboard                  Palo Alto, CA                     Application              Social content aggregation                  4/14/2011          50.0
    15       Foursquare Labs            New York, NY                      Application              Geosocial network                           6/27/2011          50.0
    16       Tower Cloud                St. Petersburg, FL                Infrastructure           Backhaul                                    10/6/2011          49.0
    17       Cellnovo                   London, UK                        Device                   Consumer healthcare device                   2/4/2011          48.4
    18       Rovio Mobile               Espoo, Finland                    Application              Mobile game                                 3/10/2011          42.0
    19       Color                      Palo Alto, CA                     Application              Photo sharing                               3/23/2011          41.0
    20       Lookout                    San Francisco, CA                 Infrastructure           Mobile device security                      9/21/2011          40.0
    21       Mavenir Systems            Richardson, TX                    Infrastructure           Convergence application server              5/31/2011          40.0
    22       INRIX                      Kirkland, WA                      Infrastructure           Traffic                                     7/25/2011          37.0
    23       Gogo                       Itasca, IL                        Carrier                  In-flight                                    2/6/2011          35.0
    24       eRecyclingCorps            Irving, TX                        Device                   Mobile phone recycler                      11/11/2011          35.0
    25       Novasom                    Glen Burnie, MD                   Device                   Consumer healthcare device                  7/11/2011          35.0


Source: Rutberg & Company
(1)     Represents companies with multiple announcements in 2011; date is listed as of the most recent announcement, and amounts are aggregated for the year

                                                                                      12
VC in Mobile—Most Active Investors

                                                      Most Active VC Investors in Mobile
                                                                                     2011

 Rank      Firm                     Number                                                  Investments (Announced)

      1    Sequoia Capital             24      Bubble Motion, Bump, Clickatell, Color, Cotendo, DailyBooth, Evernote, Flite, Inkling (2), Just Dial, MeLLmo, Meraki,
                                               MobileIron, MoboTap, Onavo, Quantenna, Sencha, Sourcebits, Square, Stoke, Synapsense, Trippy, Unity
      2    Intel Capital               23      4tiitoo, AltoBridge, Animoca, Arcsoft, Borqs, CloudMade, Digital Chocolate, GainSpan, InVisage, ip.access, July, Kno,
                                               mFoundry, Mocana, NeuString, SecureKey, SkyCross, skyrockit, Sotera, Swrve, TOA, Total Immersion, Urban Airship
      3    SV Angel                    21      AppRedeem, BankSimple, Bump, Drchrono, EggCartel, Everyme, Game Closure, Hyperink, just.me, Kno, Mindless
                                               Dribble, Onswipe, Orchestra, Parse, Poshmark, ShowMe, Sincerely, SnapGuide, Swrve, Tagstand, Trippy
      4    Google Ventures             19      Airy Labs, Astrid, Crittercism, Echoecho, Enterproid, just.me, Milk, Miso, Nettle, Ordr.in, Parse, Pocket Change, Read
                                               It Later, Rumble, Scvngr, Stickery, Subtext, ThinkNear, TweetNGo
      4    Kleiner Perkins             19      Aerohive, Apperian, Awarepoint, Cooliris, Crittercism, Fixmo, Flipboard, GOGII, iControl, INRIX, Jawbone, Kovio,
                                               Path, Session M, Shazam, Square, Stoke, Waze, WorkSmart
      6    DFJ(1)                      18      4INFO, Cloudbot, do@, GameSalad, JiWire, Medialets, MomentFeed, Neul, Opinionaided (2), Qosmos, Siklu,
                                               Synapsense, Tango, Taptu, TOA, ViVOTech, Z2Live
      7    Accel Partners              17      Animoca, Azumio, BlueSprig, Breezy, CellScope, Dropcam, GetJar, Hotel Tonight, Lookout, MoPub, Pipette, Qriously,
                                               Qwilt, Rovio, Shopmium, Skimble, SoundTracking
      8    NEA                         16      Aerohive, CellScope, Euclid Elements, Leyden Energy, Millennial Media, Pipette, Pulse, SiliconBlue, Skimble,
                                               Stitcher, Subtext, TabbedOut, Tabula, Umami, ValueFirst Messaging, Vuclip
      9    500 Startups                13      Apsalar, AwayFind, Drchrono, FastCustomer, Khush, Life360, MindSnacks, Nettle, Punchd, Stickery, TaskRabbit (2),
                                               Twilio
      9    Andreessen Horowitz         13      BlueStacks (2), Bump, Capriza, Everyme, Foursquare, Hyperink, Jawbone, Kno, Lookout, Massive Health, TinyCo,
                                               Wikets
     11    Charles River               12      DoubleDutch, Drchrono, EggCartel, Fiksu, Game Closure, InVisage, Massive Health, Millennial Media, MotherKnows,
                                               Orchestra, Sincerely, SMS GupShup
     12    QUALCOMM                    11      AliveCor, Apalya, ChaCha, Enterproid, ip.access, Livescribe, PowerCloud, Siklu, Sotera, ThinkNear, Xiaomi
     12    True Ventures               11      Appconomy, Gyroscope (2), just.me, Kiip, SoundTracking, Spectrum Bridge, Trippy, Urban Airship, Valencell,
                                               Yobongo



Source: Rutberg & Company
(1)     Includes family of related venture firms

                                                                                      13
VC in Mobile—Strategic Investors

     One in five transactions in mobile involve strategic investors. During 2011, 22.2% of
     deals involved at least one strategic investor(1), as compared to 20.6% in 2010.

     Four most active strategic investors in 2011:



                                                 (23)                               (19)        (11)   (7)


     Other active investors in 2011 (3-6 deals) span media, advertising, retail, financial,
     enterprise, device, and infrastructure sectors:




Source: Rutberg & Company
(1)     Includes limited partnership venture firms formed through strategic investors.

                                                                                           14
Thank You




            Rutberg & Company Research
                Contact Information


            Rajeev Chand
            Managing Director
            Head of Research
            rchand@rutbergco.com

            Nick Mayberry
            Equity Research Associate
            nmayberry@rutbergco.com

            Kyle Spraker
            Equity Data Associate
            kspraker@rutbergco.com
Rutberg & Company—Investment Banking




        Barry A. Newman                  Robert C. Harris              Joseph S. Sanborn
          Senior Advisor                  Vice Chairman,              Managing Director,
      Office: (415) 371-1186           Investment Banking                 Head of M&A
    bnewman@rutbergco.com             Office: (415) 371-1186         Office: (617) 262-6694
                                     rharris@rutbergco.com         jsanborn@rutbergco.com

                                       Bryan B. Rutberg
                                    Chief Executive Officer
                                    Office: (415) 371-1186
                                   brutberg@rutbergco.com


               SAN FRANCISCO                                       BOSTON
       351 California Street, Suite 1100                800 Boylston Street, 16th Floor
           San Francisco, CA 94104                            Boston, MA 02199
         Telephone: (415) 371-1186                        Telephone: (857) 453-6798
Rutberg & Company—2012 Events




          LONDON               SAN FRANCISCO               RANCHO PALOS VERDES

   Rutberg Summit: London       Future:Mobile                Wireless Influencers

      April 23-25, 2012        June 18-19, 2012             October 21-23, 2012
       Claridge’s Hotel      Westin Market Street              Terranea Resort
      London, England       San Francisco, California   Rancho Palos Verdes, California

								
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