Ten years in mobile: VC investments ($34B) and exits ($54B)

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The past ten years have seen dramatic changes in the wireless industry: the advent of smartphones and mobile apps, strides in mobile advertising and marketing, faster networks and more. And behind these changes are billions of dollars in investment. In fact, in the past ten years venture capitalists have spent $34 billion investing in the mobile industry, according to new data from research-centric investment bank Rutberg & Company. And, over the same time period, they have made $54 billion from VC-backed company exits.

Source: Rutberg & Company
(1) Exit values calculated as market capitalization at IPO offer date or M&A announced date. Only incremental market cap included for companies with multiple transactions.
(2) Excludes wireless operators and tower owners and operators

In the earlier part of the decade, wireless companies struggled to generate returns on their initial investments. Rutberg's data shows the largest number of profitable exits between 2004 and 2006, including Aruba Networks' IPO in late 2006 for $88 million.

Rutberg also observed an increase in the number of exits since 2007, including Starent's $126.4M IPO that year. Rajeev Chand, managing director and head of research for Rutberg & Company, also notes this uptick coincides with Apple's (NASDAQ:AAPL) release of its first-generation iPhone in 2007.

Perhaps most interestingly, the year 2011, to date, already has a larger number of great exits than any previous full year, even without including wireless carrier AT&T's (NYSE:T) pending action to acquire T-Mobile USA.

The top mobile VC investors for the first half of 2011 included Sequoia Capital, Kleiner Perkins, Intel Capital, NEA and DFJ, respectively.

exits of vc-backed mobile companies

Source: Rutberg & Company
(1) Exit values calculated as market capitalization at IPO offer date or M&A announced date. Only incremental market cap included for companies with multiple transactions.
(2) Excludes wireless operators and tower owners and operators

"We are in the beginning of a 10-year cycle in which mobile computing will reshape the way consumers live and businesses operate," wrote Rutberg researchers in their July mobile report. "PC Internet is a 'dress rehearsal' for what will come with mobile, and the unforeseen applications in mobile computing will exceed those from the Internet thus far."

Chand and his team put together a list of the biggest exits and selected failures. However, the failures, he said, are "harder to list because many companies are still in business and may have an opportunity to pivot." 

The biggest exits include AdMob, Aruba, Atheros, China TechFaith (China), Flarion, Pandora, Qihoo 360 (China), Starent, Tellme and TPK Holding (China). AdMob alone brought in $750 million when it was acquired by Google (NASDAQ:GOOG) in 2009.

The mobile failures Chand did note include Amp'd Mobile (which filed for chapter 11 bankrupcy in 2007), Cometa Networks (which closed in 2004), Helio, IXI Mobile, Modu, SavaJe and Vivato.

For more:
- see these additional charts
- see this Geek Wire article

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