It will be an exciting year for us mobile enthusiasts who have seen each year be proclaimed as the year of mobile for the past decade. Two mobile companies (Motricity and Velti) have gone public in the past few months. I'm excited to see the next two go public: Epocrates - mobile healthcare solutions; and Boingo Wireless - global WiFi access network.
Motricity, Velti and Epocrates all point to the strength of mobile software, content & applications, as opposed to what we've been used to seeing so far in the public markets i.e. access, device and semiconductor companies. I think Motricity and Velti are precursors to many other mobile distribution/advertising companies that will grow big over time - perhaps including companies like Getjar, Pocketgear, Where (full disclosure: a Venrock investment), Millenial Media, Jumptap, Transpera etc.
All this activity just makes me more excited about the prospects for new mobile/tablet-based software startups in all areas - consumer apps, payments, ad-tech, security, enterprise, communications etc. Dare I say that perhaps the '10s will be the decade of mobile and by the end of this decade, we will look back and wonder (i) why laptops/desktops did not disappear from our lives even sooner and (ii) how mobile has leveled the playing field across the globe for access to the Web & communications.
Anyway, back to IPOs. The last mobile company to go public was Motricity (NASDAQ: MOTR). Motricity provides a white-label content store for mobile operators to tell ringtones, wallpaper etc. MOTR has more than doubled in valuation since its IPO in June 2010, now trading at $650M enterprise value (or ~$800M equity market cap) at a TEV/2011 revenue multiple of 3.7x (TEV/2010 revenue multiple is 4.9x) and Price/2011 earnings multiple of 25x (Price/2010 earnings multiple is 51x). 2011 revenues are estimated at ~$175M, up from $133M in 2010. Here's the Motricity prospectus.
Velti (NASDAQ: VELT) went public last week. It provides mobile marketing solutions (ad creation, ad buying, ad serving). The company is valued at $700M enterprise value (or ~$770M equity market cap) at a TEV/TTM revenue multiple of 5.6x and Price/TTM earnings multiple of 63x. Revenues have grown nicely, from $90M in 2009 to $125M for trailing twelve months ended Sept 30, 2010. TTM EBITDA is $39M. Here's the Velti prospectus.
Velti is clearly more of an international play - only 2-5% of Velti's revenue comes from the US, with the bulk 75-80% coming from Europe and the remainder from Asia. In addition, Velti has created JVs in China (Cellphone Ads Service E-Exchange) and India (HT Mobile Solutions).
Despite not having a large revenue base in the US, the company turned to the US to cheaply acquire key technologies (each for at or below $10M):
- Mobclix (mobile ad exchange) in September 2010
- Media Cannon (mobile ad creation tools) in June 2010
- Ad Infuse (mobile ad network) in May 2009