LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
INDEPENDENT TECHNOLOGY RESEARCH
MOBILE APP EC...
2
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
SCREEN OF HORROR
WE CAN NO LONGER LIVE WITH...
3
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
TABLE OF CONTENTS
» How the mobile app phen...
4
Based on the study
“Bicycle for the Mind”
Initiated by
Apple
Accelerated by
Google
Cast Includes:
› 10k+ Ecosystem partn...
5
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
IPHONE LAUNCH VS NOW
JUNE 2007 – IPHONE LAU...
6
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
THE IRRESISTIBLE APPEAL OF MOBILE
» Powerfu...
7
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
CHANGE IS SHIFT FROM PACKAGED PRODUCT TO SE...
8
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
THREE PILLARS OF SUCCESS FOR MOBILE SERVICE...
9
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
(1) BEING AND STAYING RELEVANT
BE RELEVANT
...
10
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
(2) CULTIVATING LARGE ACTIVE USER BASE
LAR...
11
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
(3) CONVERTING STRONG USER RELATIONSHIPS I...
12
Ad Hoc Labs
SLOTS/CASINO/POKER ARCADE/TURN/PUZZLE BRAIN/QUIZ/WORDS
Poptacular
MGMT/SOCIAL CASUAL
Zakeh
STRATEGY/CARD BA...
13
SLOTS/CASINO/POKER ARCADE/TURN/PUZZLE BRAIN/QUIZ/WORDSMGMT/SOCIAL CASUALSTRATEGY/CARD BATTLE/RPG/SIM ACTION/ADV/SHOOTER...
14
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
MOBILE APP ECOSYSTEM CHALLENGES
» Big and ...
15
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
UNPRECEDENTED VALUE CREATION OPPORTUNITY O...
16
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
GP BULLHOUND SNAPSHOT
» Long track record ...
17
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
THE GP BULLHOUND TEAM
PER ROMAN
Managing P...
18
LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER
www.gpbullhound.com
KNOWLEDGE-BASED BANKING BUILT ON TRUST
GPB...
19
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ONE MARITIME PLAZA, SUITE
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TEL +1(415) 986 0191
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M...
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GP Bullhound Mobile App Ecosystem Report

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GP Bullhound Mobile App Ecosystem Report

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GP Bullhound Mobile App Ecosystem Report

  1. 1. LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com INDEPENDENT TECHNOLOGY RESEARCH MOBILE APP ECOSYSTEM JULY 2014 The New “Mobile App Reality” Unprecedented Value Creation Opportunity ALI DAGLI Ali.dagli@gpbullhound.com San Francisco: +1 415 500 6999 ALEC DAFFERNER Alec.dafferner@gpbullhound.com San Francisco: +1 415 986 0168 OKAN INALTAY Okan.inaltay@gpbullhound.com San Francisco: +1 415-200-4139
  2. 2. 2 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com SCREEN OF HORROR WE CAN NO LONGER LIVE WITHOUT OUR SMARTPHONES AND MOBILE APPS
  3. 3. 3 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com TABLE OF CONTENTS » How the mobile app phenomenon started » Its appeal and what has changed » The three pillars of success for developers » What consumers do most on mobile devices » The challenges » Unprecedented value creation opportunity
  4. 4. 4 Based on the study “Bicycle for the Mind” Initiated by Apple Accelerated by Google Cast Includes: › 10k+ Ecosystem partners › 1m+ Mobile App Developers › 1.75Bn Mobile users The study measured efficiency of locomotion for various species. Humans came a third of the way down the list. However, when given a bicycle, humans came in on top. 25+ years ago, this study made Steve Jobs realize that it was man’s skill as a toolmaker that categorically amplified his inherent abilities. Driving Jobs to invent his evolutionary bicycle for the mind: the “iPhone"--inaugurating today’s ubiquitous mobile app ecosystem THE NEW “MOBILE APP REALITY”THE NEW “MOBILE APP REALITY” 4
  5. 5. 5 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com IPHONE LAUNCH VS NOW JUNE 2007 – IPHONE LAUNCH IN NEW YORK MAY 2014 –ORDINARY DAY IN SAN FRANCISCO IN 2007, EVERYONE’S LOOKING AHEAD TO THEIR PURCHASE IN 2014, EVERYONE’S LOOKING DOWN AT THEIR PHONES
  6. 6. 6 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com THE IRRESISTIBLE APPEAL OF MOBILE » Powerful personal computers — with us at all times » Two-way connectivity between individuals and the world » Innumerable apps already installed — and millions available instantly » Each app curated for its purpose — customized for and by each user » Seamless app store and instant-purchasing back-end » Dynamic real-time data integration (e.g. social, location, motion)
  7. 7. 7 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com CHANGE IS SHIFT FROM PACKAGED PRODUCT TO SERVICES MODEL Content Creator Publisher Distribution Partners / Carriers Retail + Platform Third-party Development Tools Passive Consumer Consoles + Steam? Empowered Consumers IP-Based Platforms Mobile-First Web Social Networks IP-Based TVDistribution Partner Service Provider FROM TRADITIONAL ONE-WAY PACKAGED PRODUCT MODEL   TO IP-BASED TWO-WAY SERVICES MODEL » Inefficient/indirect » One-way » Few options » Control to sell » Low margins » Efficient/Direct » Two-way » Many options » Engage to keep » High margins
  8. 8. 8 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com THREE PILLARS OF SUCCESS FOR MOBILE SERVICE PROVIDERS 1. BEING AND STAYING RELEVANT 2. CULTIVATING LARGE ACTIVE USER BASE 3. CONVERTING STRONG USER RELATIONSHIPS INTO MONEY
  9. 9. 9 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com (1) BEING AND STAYING RELEVANT BE RELEVANT WANTS NEEDS EMOTIONS RELEVANCY IS PROXY FOR REPEAT USAGE/RETENTION STAY RELEVANT SATISFY/LISTEN RE-ENGAGE/BALANCE CONTINUE TO INNOVATE Messaging/Calls Dating Apps Social Networks Games Mobile Music Mobile Video ProductivityReservationsMobile Content On-demand Services
  10. 10. 10 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com (2) CULTIVATING LARGE ACTIVE USER BASE LARGE ACTIVE USER BASE IS PROXY FOR POWER/PATH TO MONETIZATION #1 in 2004 (95M MAUs) 0 200 400 600 800 1000 1200 Users on Mobile (In Millions) Mobile Platforms » Google Android » Apple iOS Mobile Gateways » Browsers » Messaging Apps » Horizontal Social Networks Mobile Services » Media » Music » Video » Utilities » Productivity Apps » Online/Offline » Games » Dating Apps » Vertical Social Networks Source: Company filings, industry news and market research, GP Bullhound.
  11. 11. 11 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com (3) CONVERTING STRONG USER RELATIONSHIPS INTO MONEY A. DIRECTLY MONETIZE USERS THROUGH APP STORE AND DIRECT PAYMENTS 1. Bank on strong engagement (IN-APP) 2. Bank on perceived monetary value (PAID) 3. Direct to owned products with 1 & 2 B. INDIRECTLY MONETIZE USERS THROUGH ADVERTISING/REV-SHARE/LICENSING 4. Sell user impressions (CPM ADVERTISING) 5. Sell user intentions (CPC ADVERTISING) 6. Sell user installs/actions (CPI/CPA ADVERTISING) 7. Direct to 3rd party products with 1 & 2 (REV-SHARE/LICENSING) C. MAKE IT FREE, NO ADS; GO FOR ULTIMATE USER GROWTH AND EVENTUAL EXIT 8. Sell the company (?)($1bn) ($19bn)
  12. 12. 12 Ad Hoc Labs SLOTS/CASINO/POKER ARCADE/TURN/PUZZLE BRAIN/QUIZ/WORDS Poptacular MGMT/SOCIAL CASUAL Zakeh STRATEGY/CARD BATTLE/RPG/SIM ACTION/ADV/SHOOTER/RACING Krasnov Games COMMUNICATE AND SOCIALIZE CONSUME MEDIA TRIGGER OFFLINE ACTIONS/EVENTS BE IN TOUCH (ONE TO ONE/ONE TO FEW) BE IN TOUCH (MANY TO MANY/SOCIAL NETWORKS) BROWSE THE WEB GET NEWSLOOK FOR INFORMATION PLAY MUSIC PLAY VIDEOS BUY OFFLINE GOODS MAKE RESERVATION ORDER ON-DEMAND SERVICE MANAGE MONEY GET HEALTHY LONGER READING MAKE CALLS FitNow MoboTap GET EDUCATION/LEARN Bagatrix WHERE DO WE SPENT MOST OF OUR TIME ON MOBILE GET THROUGH THE WEEK MANAGE EMAIL/CALENDAR GET STUFF DONE EDIT PHOTOS/VIDEOSNAVIGATEORGANIZE/CREATE DOCS/NOTES USE UTILITIES/TOOLS Alminder Cogitap Software Good.iWare GO ON A DATE WHAT CONSUMERS DO MOST ON MOBILE DEVICES PLAY GAMES SPACETIME
  13. 13. 13 SLOTS/CASINO/POKER ARCADE/TURN/PUZZLE BRAIN/QUIZ/WORDSMGMT/SOCIAL CASUALSTRATEGY/CARD BATTLE/RPG/SIM ACTION/ADV/SHOOTER/RACING COMMUNICATE AND SOCIALIZE CONSUME MEDIA TRIGGER OFFLINE ACTIONS/EVENTS BE IN TOUCH (ONE TO ONE/ONE TO FEW) BE IN TOUCH (MANY TO MANY/SOCIAL NETWORKS) BROWSE THE WEB GET NEWSLOOK FOR INFORMATION PLAY MUSIC PLAY VIDEOS BUY OFFLINE GOODS MAKE RESERVATION ORDER ON-DEMAND SERVICE MANAGE MONEY GET HEALTHY LONGER READING MAKE CALLS GET EDUCATION/LEARN WHERE DO WE SPENT MOST OF OUR TIME ON MOBILE GET THROUGH THE WEEK MANAGE EMAIL/CALENDAR GET STUFF DONE EDIT PHOTOS/VIDEOSNAVIGATEORGANIZE/CREATE DOCS/NOTES USE UTILITIES/TOOLS GO ON A DATE MONETIZATION CHARACTERISTICS OF EACH CATEGORY PLAY GAMES HIGHLY ENGAGING MOBILE SERVICES (INSTANT GRATIFICATION) HIGH APP STORE & DIRECT PAYMENTS (IN-APP/PAID) MONETIZATION POTENTIAL FREQUENTLY-USED MOBILE GETAWAYS/SOCIAL NETWORKS HIGH INDIRECT MONETIZATION POTENTIAL MOBILE PRODUCTS W/ HIGH PERCEIVED VALUE HIGH PAID AND INDIRECT MONETIZATION POTENTIAL FREQUENTLY-USED MOBILE PRODUCTS W/ RELATIVELY LOWER ENGAGEMENT PAID OR INDIRECT MONETIZATION POTENTIAL 13
  14. 14. 14 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com MOBILE APP ECOSYSTEM CHALLENGES » Big and established players outbidding competition/owning a territory » User retention — engaging/retaining users in a highly dynamic marketplace » User monetization — Free-to-play monetization; lower CPM rates on ads » User acquisition — crowded space and high user acquisition costs » Privacy and safety concerns related to personal data » Device, platform and app store fragmentation (e.g. Android, China) » Localization, culturization, or being foreign to a large market (e.g. China)
  15. 15. 15 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com UNPRECEDENTED VALUE CREATION OPPORTUNITY ON MOBILE NON-GAMING DEVELOPERS GAMING DEVELOPERS COMPANY VALUATION TIME Crime City & Modern War $210 million (Sale to Gree) 10 months Clash of Clans & Hay Day $3 billion (51% Sale to GungHo) 15 months Candy Crush Saga $5 billion (IPO) 18 months Puzzle & Dragons $7.2 billion (Market Cap Appreciation) 18 months COMPANY VALUATION TIME Instagram $1 billion (Sale to Facebook) 18 months Snapchat $4 billion (Rumoured Google Offer) 26 months Whatsapp $19 billion (Sale to Facebook) 4 years Twitter $24 billion (IPO) 6 years USER BASE REVENUES PROFITABILITY 4 4 4 USER BASE REVENUES PROFITABILITY 4 1 0 TYPICAL VALUE CREATION Strategic TYPICAL VALUE CREATION Strategic, Financial
  16. 16. 16 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com GP BULLHOUND SNAPSHOT » Long track record of success › Founded in 1999, completed over 160+ transactions › Closed 24 transactions in 2013 › 16 deals closed in 2014 H1 » A premier corporate finance advisory firm › Mergers & Acquisitions › Capital Raising and Secondary Placements › Strategic Advisory » Deep domain expertise across the Technology sector › Mobile & Gaming › Internet & Digital Media › Software & Big Data/Analytics › Consumer Technologies » Focus on top-tier emerging growth companies » Strong cross-border capabilities › Offices in San Francisco, London, Stockholm, Berlin, and Manchester › Deep, broad relationship network SELECTED RECENTLY ANNOUNCED TRANSACTIONS SOLD TOSOLD TO CASUAL DATING BUSINESS GRENDALL INVESTMENT SECONDARY SHARE SALE SECONDARY SHARE SALE INVESTMENT SOLD TOPRIVATE PLACEMENT PRIVATE PLACEMENT SOLD TO SOLD TOPRIVATE PLACEMENT PRIVATE PLACEMENT SOLD TO SOLD TOMERGED WITHSOLD TO UNDISCLOSED ASIAN INVESTORS, LIBRATONE MANAGEMENT
  17. 17. 17 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com THE GP BULLHOUND TEAM PER ROMAN Managing Partner HUGH CAMPBELL Managing Partner MANISH MADHVANI Managing Partner SIMON NICHOLLS Partner GUILLAUME BONNETON Partner LORD CLIVE HOLLICK Partner CECILIA ROMAN Director ANDRE SHORTELL Partner MARK KLIMMEK Vice President OANA CHIMINA Analyst PHILIPPE GREMILLET Analyst ALEC DAFFERNER Partner CLAUDIO ALVAREZ Director SIR MARTIN SMITH Chairman ANTONY NORTHROP Senior Adviser ALEXIS SCORER Director RAVI GHEDIA Associate ALESSANDRO CASARTELLI Senior Associate CARL BERGHOLTZ Director OLOF RUSTNER Analyst MALCOLM HORNER Associate MATT ROGERS Senior Adviser WILL SHELDON Analyst CHRISTIAN LAGERLING Co-Founder & Senior Advisor PER LINDTORP Vice President JULIAN RIEDLBAUER Partner ALI DAGLI Director GRAEME BAYLEY Partner PETER READ Board Director ADAM RUDD Vice President CARL WESSBERG Vice President OKAN INALTAY Analyst STIRLING ADELHELM Associate MATTHEW FINEGOLD Analyst PHILIP FROSSLING Analyst
  18. 18. 18 LONDON | SAN FRANCISCO | STOCKHOLM | BERLIN | MANCHESTER www.gpbullhound.com KNOWLEDGE-BASED BANKING BUILT ON TRUST GPBULLHOUND’SINDUSTRYEVENTS& SPEAKINGENGAGEMENTS AWARDWINNINGINVESTMENTBANK 2010 CORPORATE FINANCE BOUTIQUE OF THE YEAR 2010 DEAL OF THE YEAR & RUNNER-UP DEAL OF THE YEAR 2010 M&A BOUTIQUE INVESTMENT BANK OF THE YEAR & GREEN ENERGY DEAL OF THE YEAR SECTORRESEARCHGLOBALREPRESENTATION 2013 BOUTIQUE INVESTMENT BANK OF THE YEAR - UK 2013 LEADING ADVISERS OF THE YEAR 2013 DEALMAKER OF THE YEAR 40 UNDER 40 AWARD
  19. 19. 19 SAN FRANCISCO OFFICE ONE MARITIME PLAZA, SUITE 1620 SAN FRANCISCO, CA 94111 TEL +1(415) 986 0191 FAX +1(415) 986 0180 MEMBER OF FINRA HQ: LONDON OFFICE 52 JERMYN STREET, LONDON SW1Y 6LX TEL +44(0)207 101 7560 FAX +44(0)207 101 7561 AUTHORISED AND REGULATED BY THE FCA & PRA STOCKHOLM OFFICE BIRGER JARLSGATAN 5 111 45 STOCKHOLM, SWEDEN TEL +46(0)8 545 074 14 FAX: +46(0)8 545 071 01 BERLIN OFFICE OBERWALLSTR. 20, 101 17 BERLIN, GERMANY TEL +49(0)30 610 80 600 FAX +49(0)30 610 80 6029 MANCHESTER OFFICE 1 NEW YORK ST MANCHESTER M1 4HD TEL +46(0)8 545 074 14 FAX: +46(0)8 545 071 01 Disclaimer: The contents of this presentation document ("Presentation") shall not be deemed to be any form of offer or binding commitment on the part of GP Bullhound LLP. This Presentation is provided for use by the intended recipient for information purposes only. It is prepared on the basis that the recipients are sophisticated investors with a high degree of financial sophistication and knowledge. 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