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Venture Capital Activity in the Mobile Applications Industry - August 2013

by Gemma Morris

  • 08 Aug 2013
  • PE
 
The rise in prominence of mobile applications has been reflected by the increase in venture capital investment into the industry in recent years. Preqin’s Venture Deals Analyst shows that from 2008 to 2013 YTD, there have been a total of 1,068 financings of portfolio companies primarily operating in the mobile applications industry. The aggregate value of such deals in this time frame is $5.3bn.
 
In 2008, 91 deals were announced in the mobile applications industry, with an aggregate value of $720mn. The following year saw 90 deals, though with a much lower aggregate value of $380mn. The average deal size dropped 54% from $11mn in 2008 to $5.7mn in 2009. This stark contrast in average deal size is further shown when comparing the largest deals that occurred in 2008 and 2009. The largest deal in 2008 was Motricity Inc.’s $185mn financing from New Enterprise Associates,  Advanced Equities and  Icahn Associates Corp. In 2009, however, the $20mn investments in Bling Nation, Carrier IQ Inc. and Tower Cloud, Inc. each were the largest financing rounds in the mobile applications industry that year.
 
Data from Preqin’s Venture Deals Analyst shows that after the dip in the aggregate deal value in 2009, there has been an increase in deal flow and deal value in the mobile applications industry during the following years. Looking more closely at the data year on year, 2009 – 2010 witnessed a 36% rise in deal flow from 90 to 122 financings, and an increase of 67% in aggregate value, from $380mn to $635mn. In 2011, the mobile applications industry saw 247 deals worth a total value of $1.4bn, showing a more rapid surge in activity between 2010 and 2011, with the number of deals and aggregate deal value increasing by 102% and 115% respectively. Activity continued to rise between 2011 and 2012, however more steadily – a 28% increase in deal flow to 316 deals, and an increase of 12% in aggregate value to $1.5bn. 
 
The investment activity in the mobile application industry so far this year appears to follow the trend of increasing activity in terms of deal flow. In 2013 YTD, there have been 202 financings of mobile applications portfolio companies, compared to 182 financings during the same period last year. However, the aggregate deal size of financings so far in 2013 is 30% lower than at a similar stage in 2012, and the average deal value of $3.9mn of 2013 YTD is significantly lower than last year’s average of $6.2mn. 
 
Venture capital activity in the mobile applications industry has seen strong growth between 2009 and 2012, both in terms of deal flow and value. 2013 so far has followed this trend in terms of the number of deals but has not yet reached the high aggregate values seen in the previous year. 

The rise in prominence of mobile applications has been reflected by the increase in venture capital investment into the industry in recent years. Preqin’s Venture Deals Analyst shows that from 2008 to 2013 YTD, there have been a total of 1,068 financings of portfolio companies primarily operating in the mobile applications industry. The aggregate value of such deals in this time frame is $5.3bn.

In 2008, 91 deals were announced in the mobile applications industry, with an aggregate value of $720mn. The following year saw 90 deals, though with a much lower aggregate value of $380mn. The average deal size dropped 54% from $11mn in 2008 to $5.7mn in 2009. This stark contrast in average deal size is further shown when comparing the largest deals that occurred in 2008 and 2009. The largest deal in 2008 was Motricity Inc.’s $185mn financing from New Enterprise Associates,  Advanced Equities and  Icahn Associates Corp. In 2009, however, the $20mn investments in Bling Nation, Carrier IQ Inc. and Tower Cloud, Inc. each were the largest financing rounds in the mobile applications industry that year.

Data from Preqin’s Venture Deals Analyst shows that after the dip in the aggregate deal value in 2009, there has been an increase in deal flow and deal value in the mobile applications industry during the following years. Looking more closely at the data year on year, 2009 – 2010 witnessed a 36% rise in deal flow from 90 to 122 financings, and an increase of 67% in aggregate value, from $380mn to $635mn. In 2011, the mobile applications industry saw 247 deals worth a total value of $1.4bn, showing a more rapid surge in activity between 2010 and 2011, with the number of deals and aggregate deal value increasing by 102% and 115% respectively. Activity continued to rise between 2011 and 2012, however more steadily – a 28% increase in deal flow to 316 deals, and an increase of 12% in aggregate value to $1.5bn.

The investment activity in the mobile application industry so far this year appears to follow the trend of increasing activity in terms of deal flow. In 2013 YTD, there have been 202 financings of mobile applications portfolio companies, compared to 182 financings during the same period last year. However, the aggregate deal size of financings so far in 2013 is 30% lower than at a similar stage in 2012, and the average deal value of $3.9mn of 2013 YTD is significantly lower than last year’s average of $6.2mn.

Venture capital activity in the mobile applications industry has seen strong growth between 2009 and 2012, both in terms of deal flow and value. 2013 so far has followed this trend in terms of the number of deals but has not yet reached the high aggregate values seen in the previous year.

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