Mobile Moves to Mainstreet:Implications for the VC and M&A MarketLinda Gridley, President & CEO, Gridley & Company LLC    ...
Global Mobile Internet Ecosystem Poised forBreakout Growth $198BN Mobile internet revenue by 2015 (1)                     ...
Mobile Usage is Core to U.S. ConsumerIdentity     96%                 Mobile phone penetration currently, ~100% by 2013 (1...
Big Change in Expectations in Last 5 Years                                                                           Newsp...
Summarizing the Mobile Ecosystem                    Marketing/                                  Commerce /          Conten...
Mobile Landscape Today     Marketing/          Commerce /                                          Content   Social Advert...
Mobile is a Marketer’s Dream   • Mobile phones are ubiquitous and immediate   • Highly attentive and captive audience   • ...
How Mobile is Changing E-Commerce• Consumers carrying devices that know more about environment than they  do• Ability to p...
Mobile Connects Us More Than Ever Before  600MM+ Mobile social networkers globally by 2013 (1)        43%               Pe...
Consumption of Mobile Content Growing   • Mobile music spend shifting: ringtone purchase to music access from the     clou...
Lots of Interest in Mobile from VCs     Marketing/                   Commerce /                                           ...
Lots of Interest in Mobile from VCs  • Mobile investments this year may outpace 2010 + 2009                               ...
Where Has Capital Gone?$ in millions      Marketing/                               Commerce /                             ...
Key Investment Themes to Date               • Wireless infrastructure driven 2005 – 2007               • Investment in SMS...
Key Investors in Mobile               Current Investments in Mobile Digital Media Marketing/                     10 Advert...
Mobile M&A Will Explode as Models Develop  • M&A is lagging behind investments, but it will come like a “tsunami”         ...
Selected Recent M&A Activity     Marketing/          Commerce /                                           Content   Social...
Where Have M&A Dollars Gone?$ in millions      Marketing/                     Commerce /                                  ...
Key M&A Themes to Date  2005 – 2006                • Wireless infrastructure driven                • One off application a...
Acquirers in Mobile                9   Marketing/  Advertising    Analytics Commerce/                    6  Payments      ...
Mobile M&A Winners Circle: eBAY• eBay as the strategic global commerce partner of choice                                  ...
Advice for the Audience           22
Good News for the Investors: It’s Still Early                                      2011                                   ...
Advice for the Private Companies • When buyers and investors go beyond “test dollars”, they will look   to the #1 and #2 p...
To the Strategic Buyers: It’s Complicated • Complex ecosystem with lots of entry possibilities • Lots of strategic M&A com...
…And Competitive            Marketing/          Commerce /                                                  Content   Soci...
QUESTIONS?           Contact us for an informative discussion.      Linda Gridley                           Pratik Patel  ...
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Gridley Presentation at Mobile: IAB Marketplace July 18, 2011

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Mobile Moves to Mainstreet:
Implications for the VC and M&A Market
Linda Gridley, President & CEO, Gridley & Company LLC

July 18, 2011
Crowne Plaza Hotel, New York City

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Gridley Presentation at Mobile: IAB Marketplace July 18, 2011

  1. 1. Mobile Moves to Mainstreet:Implications for the VC and M&A MarketLinda Gridley, President & CEO, Gridley & Company LLC July 18, 2011 Crowne Plaza Hotel, New York City 1
  2. 2. Global Mobile Internet Ecosystem Poised forBreakout Growth $198BN Mobile internet revenue by 2015 (1) (2) $102BN Mobile data plan revenue by 2016, at a 9% 2011-2016 CAGR $31BN Mobile commerce revenue by 2016, at a 39% 2011-2016 CAGR (3) $21BN Mobile ad revenue by 2016, at a 44% 2011-2016 CAGR (4)(1) Source: ABI Research (November 2010 )(2) Source: ABI Research (March 2011)(3) Source: Forrester (June 2011)(4) Source: Gartner (June 2011) 2
  3. 3. Mobile Usage is Core to U.S. ConsumerIdentity 96% Mobile phone penetration currently, ~100% by 2013 (1) 27% Households that are wireless only (2) 53% U.S. mobile internet users who access internet at least once a day (3) 34% Adults use their phones to send or receive email (2) 47% Americans who use a mobile device to access local news and information (4)(1) Source: CTIA: The Wireless Association (December 2010)(2) Source: Pew Internet & American Life “Generations and their gadgets” (February 2011)(3) Source: Pew Internet & American Life Project Survey (July 2010)(4) Source: Pew 2011 State of the News Media Report (March 2011) 3
  4. 4. Big Change in Expectations in Last 5 Years Newspapers, Magazines, Watch Books Camera Computer Telephone GPS, Snail Maps, Mail SMS Compass Ring Tones Video Music Camera PDA Range Finder Telephone Game Credit Cards, Console Identity Alarm Music Clock Player 4
  5. 5. Summarizing the Mobile Ecosystem Marketing/ Commerce / Content Advertising/ Social PaymentsPersonal Analytics Local Hardware Network 5
  6. 6. Mobile Landscape Today Marketing/ Commerce / Content Social Advertising/Analytics Payments 6
  7. 7. Mobile is a Marketer’s Dream • Mobile phones are ubiquitous and immediate • Highly attentive and captive audience • Mobile = new targeting capabilities – Location-based targeting – Intent-based targeting • More than 60% of mobile phone users comfortable with mobile marketing (1)(1) Source: InMobi and comScore Survey (August 2010) 7
  8. 8. How Mobile is Changing E-Commerce• Consumers carrying devices that know more about environment than they do• Ability to pinpoint shopper’s location and engage real-time Real time ads, offers, etc. $$• Consumers using mobile devices at different points of the purchase cycle: – Discounts and deals – Product / experience discovery – Store locator – Comparison shopping and reviews – Checkout• Each point of the purchase cycle provides an opportunity to engage, redirect, and add value to purchase decisions for shoppers 8
  9. 9. Mobile Connects Us More Than Ever Before 600MM+ Mobile social networkers globally by 2013 (1) 43% Percent of global web users who will access social networks by mobile (1) 250MM+ Facebook mobile users as of June 2011 (2) $1.0BN+ Mobile social networking revenues by 2013 (3) • Location-based socialization services, games, SMS, and IM are all in development – Social implications for real-time broadcast of location and intent(1) Source: eMarketer (November 2009)(2) Source: Facebook Statistics (June 2011)(3) Source: Informa (March 2010) 9
  10. 10. Consumption of Mobile Content Growing • Mobile music spend shifting: ringtone purchase to music access from the cloud • Mobile device improvements will spur growth in mobile gaming and mobile video US Mobile Content by Revenue ($BN)Gaming $3.5 $3.1 $2.7Video $2.0 $1.5 $1.1Music 2009 2010 2011 2012 2013 2014 Source: eMarketer (August 2010) 10
  11. 11. Lots of Interest in Mobile from VCs Marketing/ Commerce / Content Social Advertising/Analytics Payments Represents companies with at least $10MM in investments 11
  12. 12. Lots of Interest in Mobile from VCs • Mobile investments this year may outpace 2010 + 2009 Private Placement Investments by Year ($MM) $1,101 $870 $757 $571 $641 $552 $385 2005 2006 2007 2008 2009 2010 2011YTDSource: CapIQ, includes investments >$5MM 12
  13. 13. Where Has Capital Gone?$ in millions Marketing/ Commerce / Content Social Advertising/Analytics Payments $1,579 $870 $749 $375 $359 $356 $321 $173 ‘05-’07 ‘08-’10 ‘05-’07 ‘08-’10 ‘05-’07 ‘08-’10 ‘05-’07 ‘08-’10Source: CapIQ, includes investments >$5MM 13
  14. 14. Key Investment Themes to Date • Wireless infrastructure driven 2005 – 2007 • Investment in SMS & basic marketing • Investment in simple apps 2008– TODAY • Investing into network effect themes • Payment and Marketing led businesses getting majority of attention 14
  15. 15. Key Investors in Mobile Current Investments in Mobile Digital Media Marketing/ 10 Advertising 9 Analytics 8 7 Commerce/ Payments Content Social 15
  16. 16. Mobile M&A Will Explode as Models Develop • M&A is lagging behind investments, but it will come like a “tsunami” M&A Volume by Year ($MM) $1,829 $1,086 $930 $719 $443 $419 $429 2005 2006 2007 2008 2009 2010 2011YTDSource: CapIQ 16
  17. 17. Selected Recent M&A Activity Marketing/ Commerce / Content Social Advertising/Analytics Payments 17
  18. 18. Where Have M&A Dollars Gone?$ in millions Marketing/ Commerce / Content Social Advertising/Analytics Payments $1,760 $2,251 Mostly small, $590 undisclosed deals $496 $236 $86 ‘05-’07 ‘08-’10 ‘05-’07 ‘08-’10 ‘05-’07 ‘08-’10 ‘05-’07 ‘08-’10Source: CapIQ, Gridley estimates 18
  19. 19. Key M&A Themes to Date 2005 – 2006 • Wireless infrastructure driven • One off application acquisitions 2007– 2008 • M&A at some scale • Early marketing related transactions 2009– TODAY • Beginning to expand beyond marketing oriented services 19
  20. 20. Acquirers in Mobile 9 Marketing/ Advertising Analytics Commerce/ 6 Payments 4 4 Content Social 20
  21. 21. Mobile M&A Winners Circle: eBAY• eBay as the strategic global commerce partner of choice Discover Pay Retailer Nearby Used, online In store Online retail scanner Virtual goods Mobile Location based service Local Merchants / At Home SMB Nearby Used, online Any product Online retail 21
  22. 22. Advice for the Audience 22
  23. 23. Good News for the Investors: It’s Still Early 2011 ~ $6BN Comments: • 35% U.S. smartphone penetration ~ $3BN – Price points will continue to drop ~ $2BN • Innovation • What is a mobile Sub device? $500MM Payments Content Marketing Commerce Source: Aite Group (November 2010) eMarketer (August 2010) Gartner (June 2011) Forrester (June 2011) 23
  24. 24. Advice for the Private Companies • When buyers and investors go beyond “test dollars”, they will look to the #1 and #2 players • SCALE! – get some good blue-chip client case studies and maximize your subscriber base • Stickiness will give you leverage with buyers • Stay ahead in innovation: you may be the leader now, but so was MySpace 24
  25. 25. To the Strategic Buyers: It’s Complicated • Complex ecosystem with lots of entry possibilities • Lots of strategic M&A coming – start looking now! On Deck In-store Payments Commerce Photo Display Food In app Mkt / Adv Events /Analytics Social Measurement Cities Local Payments Shop Books Content Video Music Games News Events 25
  26. 26. …And Competitive Marketing/ Commerce / Content Social Advertising/Analytics Payments 26
  27. 27. QUESTIONS? Contact us for an informative discussion. Linda Gridley Pratik Patel 212-400-9710 212-400-9712lgridley@gridleyco.com ppatel@gridleyco.com 27

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