The latest issue of our 2Q 2016 Mobile Market Update, highlighting trends in M&A, financing, and capital markets for private and public companies in Mobile, is now available.
2. Mobile Market Update
• Capital Markets – Mobile Software and Solutions companies performed in-line with the NASDAQ, and
outperformed the S&P in 2Q 2016. Handsets, Wireless and Diversified Infrastructure, IoT / M2M and
Mobile Marketing and Advertising companies continued to trail the broader market indices
• Trading Multiples – Mobile Software & Solutions Companies (1.9x LTM revenue median), along with
Handsets companies (0.5x LTM revenue median) rose in 2Q 2016, whereas Wireless & Diversified
Infrastructure (1.7x LTM revenue median) and Mobile Marketing & Advertising companies (2.0x LTM
revenue multiple) declined, while IoT / M2M companies (1.1x LTM revenue) held steady
Page | 2
• M&A Activity – M&A activity slowed in 2Q 2016
with 81 deals, which amounts to the lowest volume
since 2Q 2014. M&A aggregate transaction value
increased sharply over the prior quarter and reached
$10.4 billion. Notable transactions include Tencent’s
$8.6 billion acquisition of an 84% stake in Supercell
and Verizon’s $900 million acquisition of Telogis
• Investment Activity – Investment volume rose
steadily and aggregate values rose sharply, with 249
investments and $14.6 billion in value for 2Q 2016.
Notable recent investments include Chinese
ridesharing company Didi Kuaidi’s $4.5 billion raise,
and Uber Technologies’ $3.5 billion raise
3. Mobile Capital Markets Performance
Page | 3
Since 2013, Mobile Software and Solutions companies (+59.8%) have outperformed broader market
indices (S&P 500 and NASDAQ) while Handsets (+8.1%), Wireless & Diversified Infrastructure (+13.2%),
IoT / M2M (-10.6%), and Mobile Marketing & Advertising (-28.5%) companies have underperformed on
the whole
_______
Source: Capital IQ as of 6/30/16; refer to public comparables for constituents
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
NASDAQ: +55.6%
S&P 500: +43.5%
Mobile Software
& Solutions: +59.8%
Mobile Marketing
& Advertising: (28.5%)
Wireless & Diversified
Infrastructure: +13.2%
IoT / M2M: (10.6%)
Handsets: +8.1%
4. Mobile Comparable Public Companies
Page | 4
Median:
1.9x
Mobile Software & Solutions
_______
Source: Capital IQ as of 6/30/16; companies arranged by descending enterprise value
2.1x
0.9x
2.7x
1.9x
2.2x
1.5x 1.5x
8.8x
1.8x
0.9x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
LTM Revenue Multiple
2.9x
1.9x
0.7x
1.1x
0.7x
0.8x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
LTM Revenue Multiple
Median:
1.1x
IoT / M2M
5. LTM Revenue Multiple
Mobile Comparable Public Companies (Cont.)
Page | 5
Median:
1.7x
Wireless & Diversified Infrastructure
_______
Source: Capital IQ as of 6/30/16; companies arranged by descending enterprise value
Mobile Marketing & Advertising
2.2x
3.3x
0.7x
2.6x
1.4x
0.5x
1.7x
1.6x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
2.0x
0.2x
2.2x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
LTM Revenue Multiple
Median:
2.0x
6. Mobile Comparable Public Companies (Cont.)
Handsets
_______
Source: Capital IQ as of 6/30/16; companies arranged by descending enterprise value
2.9x
0.6x
0.3x
0.2x
1.3x
0.5x
0.4x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
LTM Revenue Multiple
Median:
0.5x
Page | 6
12. Transaction Overview:
• $250 million acquisition of Nexmo by Vonage
- $194 million cash, $36 million stock, $20 million potential earn-out
• Financial metrics:
- 2015 revenue estimated at $70 million, implying an approximate 3.6x
2015 revenue multiple
- Nexmo had raised $37 million in funding prior to the acquisition, with a
post-money valuation of $303 million at the time of its most recent
financing
Target Description:
• Provides API and SDK PaaS to enable voice, text, chat application and phone
verification services for enterprises and developers globally
• Nexmo enables applications and enterprises to communicate with their
customers reliably and with ease, no matter where in the world they are
located
Transaction Commentary:
• "By combining Vonage's rapidly growing Unified Communications as a Service
business, with Nexmo, the second largest player in Cloud PaaS, we are creating
the future of Cloud Communications. These companies represent a set of
strategic, technology and human resources assets that deliver the broadest
services offering in our industry.“ – Alan Masarek, CEO of Vonage
• Our API technology, global network of interconnected carriers, and messaging
expertise, combined with Vonage's powerful brand, industrial-strength
infrastructure and second-to-none voice capabilities, will enable us to provide
an unmatched value proposition to businesses.“ – Tony Jamous, CEO of Nexmo
On May 5, 2016
Mobile M&A Case Study
Page | 12
_______
Source: 451 Group, PitchBook, acquirer press release
ACQUIRED
13. Top Acquirers in Mobile
Page | 13
Buyer # Acquisitions Total Value ($M) Targets
23 936
AdMovate, Alike, Anchor, Astrid, Aviate, Bignoggins, Blink, BrightRoll, Cooliris, Flurry, GhostBird Software, Go Poll Go, Hitpost,
Incredible Labs, Jybe, Loki Studios, Luminate, MessageMe, Quik.io, Qwiki, Summly, Wander, Zofari
21 1,096
Agawi, Bitspin, Bump Technologies, Enterproid (Divide), Firebase, Flexycore, Fly Labs, Green Throttle Games, Input Factory,
Jetpac, Jibe Mobile, mDialog, Pie.co, Pixate, Quest Visual, RelativeWave, Timeful, Tinker Square, wavii, Waze, WIMM Labs
15 6,058
6Wunderkinder, Acompli, Capptain, Datazen Software, DoubleLabs, FieldOne Systems, HockeyApp, id8, Mobile Data Labs
(MileIQ), Nokia (assets), Sunrise, SwiftKey, Wunderlist, Xamarin, Zikera (assets)
12 30
AlgoTrim, Catch.com, Coherent Navigation, Embark, Flyby Media, Mapsense, Metaio, Perceptio, Prss, SnappyLabs, Swell,
TestFlight
Top Acquirers by Volume – 10+ Acquisitions, 2013 – Present
Top Acquirers by Total Transaction Value – $1.5B+, 2013 – Present
_______
Source: 451 Group; includes transactions with disclosed, estimated, undisclosed values
Buyer
Total Value
($M)
Targets
19,100 Branch Media, Luma, Osmeta, Parse, WhatsApp
8,568 Miniclip, Supercell
6,058
6Wunderkinder, Acompli, Capptain, Datazen Software, DoubleLabs, FieldOne Systems, HockeyApp, id8, Mobile Data Labs (MileIQ), Nokia (assets),
Sunrise, SwiftKey, Wunderlist, Xamarin, Zikera (assets)
1,850 91 Wireless Websoft
1,580 AutoNavi Holdings
1,540 AirWatch
1,530 Supercell
15. Transaction Overview:
• $61 million PE Growth / Expansion investment in Flipp by General
Atlantic, valuing the Company at $400 million post-money
• As of this latest financing, Flipp as raised $78.5 million in funding to
date
• General Atlantic will join Insight Venture Partners as a primary investor
in Flipp, and will have a seat on the board
Target Description:
• Provider of mobile application-based consumer marketplace. The
company offers an online platform that aggregates digital circulars from
retailers and stores, enabling users to plan weekly shopping and seek
out appropriate local deals
Transaction Commentary:
• The funds raised will be used to grow the company’s footprint,
partnerships and further development of its platform
• “Flipp is helping retailers transform their marketing strategy. It’s exciting
to see how our technology is enabling retailers to achieve incremental
store trips, increased consumer engagement, and a higher ROI with
reduced costs,” said Wehuns Tan, CEO and co-founder of Flipp.
“General Atlantic’s expertise in global expansion and significant capital
base will enable us to grow our footprint, extend our partnerships, and
further accelerate how we deliver innovation into the hands of
consumers around the world.”
On April 14, 2016
Mobile Investment Case Study
_______
Source: PitchBook, Forbes, Betakit
Page | 15
INVESTED IN
18. Top Series A Investors in Mobile
Top Investors by Volume, 2013 – Present
_______
Source: PitchBook; number of investments may include follow-on investments in same target
Investor Investments Targets
27
90 Seconds, Backwater Technologies, Beijing Perfect Creative Technology, Carousell, Clari, Cryptopy Technologies, Girnar Software, Instacart, Kahuna, Keen
Labs, Luminate Wireless, NuBank, Octro, On Haiaihaisi IT, PicsArt, Plain Vanilla Games, Relcy, Shopular, Thanx, TinyOwl Technology, Trippy, WeLab,
WizRocket Technologies, Zilingo, Zoomcar India
26
Azumio, Cornershop, CrownIT, Ensygnia, Fever Labs, Gametime United, Hammer & Chisel, Industrial Toys, Invoice2go, JobToday, Juspay, Lola, Mubble,
MySmartPrice, Naritiv, Neumob, Nextbit Systems, Shuddle, Skydio, Sprig, UrbanClap, URX, Vinted, Wallapop, WizRocket, Zenoti
21
App.io, Bloodhound, Carousell, Catch That Bus, Clip, Eaze Solutions, Kudo, Mediaspike, Mojio, Next Door Learning Solutions, Shots Mobile, Silverpush,
SkyGiraffe, SpotHero, Sprig, Tableapp, Trocafone, VERSUS IQ, Videogram, Virool
18
BetterDoctor, Bitglass, Branch Metrics, Cape Productions, DataVisor, GQQii, GrowingIO, Luminate Wireless, mNectar, Movius Interactive, Niantic, Pager,
Sentry, SocialRadar, Spare5, Tuya, Tynker
15 Azimo, Blinkist, Fortumo, Giddy (Boxed), Kaleo Software, Motivation Science, Plain Vanilla Games, Playdek, Playdots, Scopely, When I Work, Wochit
15
Atzuche, Bee Cave Games, Bugsnag, Confer Technologies, Edaixi, GrowingIO, Hoodinn Interactive, Klook Travel Technology, Machinity, Reebonz, Shenzhen
Wangzhi Technology, Tasteful, The Flatiron School, Wuhu Cube Network Information Service
14 Adcade, Amino, Betable, ChatID, Estimote, Even, Giddy (Boxed), Hightower, Informed Data Systems, Jello Labs, RigUp, Studio SBV, The Flatiron School, Veri
13 Amino, Hey, Jello Labs, KeepTruckin, LotusFlare, MediaSpike, MobileDay, N3twork, Nextbit Systems, Niantic, Product Hunt, Spruce, URX
13 Amino, BloomThat, Cargomatic, Coopkanics, FiftyThree, Instacart, Jello Labs, Product Hunt, Reserve Media, Studio SBV, TIKL, URX, Zesty
13 99Taxis, Emprego Ligado, Even, MangoPlate, MediSafe Project, Naldo, Navdy, OpenSignal, Peak, Playdek, Simplest Software, Workspot, Zoom
Page | 18
19. Top Series B Investors in Mobile
Top Investors by Volume, 2013 – Present
_______
Source: PitchBook; number of investments may include follow-on investments in same target
Investor Investments Targets
29
Beijing Perfect Creative Technology, Blue Danube Labs, Citrus Payment Solutions, Clari, Cryptopy Technologies, Dayima, Drawbridge, Faaso’s Food Services,
Feidee, Girnar Software, Instacart, Kahuna, Mishi, Mobvoi, Moovit, Myfriday.cn, Near, NuBank, On Haiaihaisi IT, Shanhai Bai Sheng IT, Skillz, Skyhigh
Networks, TinyOwl Technology, True Software, Ver se’ Innovation, WhisperText, Wuxi Maimaibao IT, Yunmanman, Zoomcar India
13
CartoDB, Fever Labs, Flaregames, ForgeRock, Hammer & Chisel, MobStac, MySmartPrice Web Technology, Origami Logic, Roofoods, Sprig, SwiftKey,
UrbanClap Technologies, Vinted
12 Apperian, CafeX, Gengo, LISNR, NetSpeed Systems, Nexmo, Occipital, Qnovo, Reflektion, Swrve New Media, Zumigo
12 99Taxis, AppsDaily, August Home, Beijing Unisound IT, ClearCare, Curbside, Ineda Systems, Kaleo Software, Leanworks, Workspot
11
Adelphic, Aquto, Atzuche, Confer Technologies, Edaixi, Eleme, Fastback Networks, PinGuo Technology, Quri, Shenzhen Wangzhi Technology, The Flatiron
School
Page | 19
20. Top Series C Investors in Mobile
Top Investors by Volume, 2013 – Present
_______
Source: PitchBook; number of investments may include follow-on investments in same target
Investor Investments Targets
18
AgilOne, Beijing Century Technology, Beijing Days Billion Technology, CooTek IT, Citrus Payment Solutions, Dayima.com, Drawbridge, Druva Software,
Eleme, Inkling Systems, Instacart, Moovit, NuBank, Skyhigh Networks, True Software, Ver se’ Innovation, WhisperText, Yunmanman
11 Boxed, ContextLogic, DraftKings, lwjw, Keep, Music.ly, Poshmark, Quixey, WePiao
9 BlaBlaCar, ForgeRock, Invoice2go, Origami Logic, Roofoods, Space Ape, UserTesting, Vinted, Wallapop
9 Apperian, Drawbridge, Flipboard, Instacart, Remind, Tantan, True Software, Victorious, Yixia
8 Apperian, Gengo, Hungama, ip.access, iZettle, Nexmo, Snapdeal, Zya
7 Cootek IT, Cyanogen, ip.access, Siklu, Tapingo, Verve Mobile, Zoom
7 AgilOne, Capriza, Druva Software, FutureSimple, Inkling Systems, ItsOn, Smartling
7 BlaBlaCar, Cyanogen, DoubleDutch, Flipboard, FutureSimple, iZettle, Roofoods
7 Affirmed Networks, Edaijia, Eleme, Fastback Networks, Huoli Tianhui, Quri, Shenzhen Wangzhi Technology
6 PlaceIQ, Quixey, Smartling, Wayin, Zerto
Page | 20
21. Top Series D+ Investors in Mobile
Top Investors by Volume, 2013 – Present
_______
Source: PitchBook; number of investments may include follow-on investments in same target
Investor Investments Targets
10 Chukong Technologies, Dada, Druva Software, Eleme, Straya, Yixia, Zomato Media
9 Centrify, Hotel Tonight, InVisionApp, Lookout, OpenX, Roofoods
8 Centrify, DoubleDutch, iZettle, Lookout, OpenX, Roofoods
7 INRIX, InVisage Technologies, iZettle, Joyent, Urban Airship
7 AltoBeam, Electric Cloud, Hotel Tonight, PlaceIQ, Smartling, Zerto
6 Chukong Technologies, DraftKings, Hotel Tonight, InVisage Technologies, lwjw
6 90min, Avalara, Fastly, Hotel Tonight, Zerto
5 DataXu, DraftKings, Integral Ad Science
5 One Kings Lane, ServiceMax, Uber Technologies
5 DoubleDutch, Smule, Thinking Phone Networks
Page | 21
22. HAS BEEN ACQUIRED
BY
Financial Advisor to
the Seller
Recent Awards and Nominations
HAS BEEN ACQUIRED BY
A DIVISION OF
Financial Advisor to
the Seller
HAS BEEN ACQUIRED
BY
Financial Advisor to
the Seller
HAS BEEN ACQUIRED BY
A PORTFOLIO COMPANY OF
Financial Advisor to
the Seller
2013 TMT DEAL OF
THE YEAR <$100M
CONSUMER
SERVICES
DEAL OF THE YEAR
CROSS BORDER
DEAL OF THE YEAR
2014 TMT DEAL OF
THE YEAR <$100M
CORPORATE /
STRATEGIC ACQUISITION
OF THE YEAR
2014 ONLINE AND
MOBILE TECH DEAL
OF THE YEAR
HAS BEEN ACQUIRED
BY
Financial Advisor to
the Seller
HAS BEEN ACQUIRED
BY
Financial Advisor to
the Seller
2012 TMT DEAL OF
THE YEAR <$100M
7th ANNUAL
INTERNATIONAL M&A
AWARDS
2015 WINNER
HAS ACQUIRED
Financial Advisor to
the Buyer
Page | 22
Headwaters Technology, Media & Telecom (TMT) team has
won awards for
Online and Mobile Tech Deal of the Year
& Consumer Services Deal of the Year
and back-to-back M&A Advisor TMT Deal of the Year
awards
23. Deep Industry Focus Leads to Successful Transactions
_______
Certain transactions completed by Headwaters MB bankers at prior firms
HAS BEEN ACQUIRED
BY
Financial Advisor to
the Seller
HAS BEEN ACQUIRED
BY
Financial Advisor to
the Seller
HAS BEEN ACQUIRED BY
Financial Advisor to
the Seller
HAS BEEN ACQUIRED BY
Financial Advisor to
the Seller
CERTAIN ASSETS
ACQUIRED BY
Financial Advisor to
the Seller
HAS ACQUIRED
Financial Advisor to
the Buyer
HAS BEEN ACQUIRED
BY
Financial Advisor to
the Seller
HAS BEEN ACQUIRED
BY
Financial Advisor to
the Seller
HAS DIVESTED MOST OF
ITS ASSETS TO
Financial Advisor to
the Seller
HAS BEEN ACQUIRED BY
Financial Advisor to
the Seller
STRATEGIC
PARTNERSHIP
WITH
Sole Advisor
HAS BEEN ACQUIRED
BY
A PORTFOLIO COMPANY
OF
Financial Advisor to
the Seller
Page | 23
24. Contact
www.headwatersmb.com
Gary Moon
Managing Director
Head of Technology, Media & Telecom
Investment Banking
Office: (415) 766-3862
Cell: (650) 515-8734
gmoon@headwatersmb.com
135 Main St
Suite 800
San Francisco, CA 94105
Ryan McCarthy
Director
Technology, Media & Telecom
Investment Banking
Office: (415) 766-3864
Cell: (203) 984-9057
rmccarthy@headwatersmb.com
135 Main St
Suite 800
San Francisco, CA 94105
Page | 24
25. Disclaimer
Disclosure: This newsletter is a periodic compilation of certain economic and corporate information, as well as completed and
announced merger and acquisition activity. Information contained in this newsletter should not be construed as a
recommendation to sell or buy any security. Any reference to or omission of any reference to any company in this newsletter
should not be construed as a recommendation to buy, sell or take any other action with respect to any security of any such
company. We are not soliciting any action with respect to any security or company based on this newsletter. The newsletter is
published solely for the general information of clients and friends of Headwaters MB, LLC. It does not take into account the
particular investment objectives, financial situation, or needs of individual recipients. Certain transactions, including those
involving early stage companies, give rise to substantial risk and are not suitable for all investors.
This newsletter is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and
it should not be relied upon as such. Prediction of future events is inherently subject to both known and unknown risks, and other
factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this
newsletter. Opinions expressed are our present opinions only and are subject to change without notice. Additional information is
available upon request. The companies mentioned in this newsletter may be clients of Headwaters MB, LLC. The decisions to
include any company in this newsletter is unrelated in all respects to any service that Headwaters MB, LLC may provide to such
company. This newsletter may not be copied or reproduced in any form, or redistributed without the prior written consent of
Headwaters MB, LLC. The information contained herein should not be construed as legal advice.
Page | 25