Mobile internet: record $19.2B invested, stock market sectors return up to 78% in last 12 months

October 27, 2014

With mobile internet revenue forecast to grow to $700B, VCs and corporates invested a record $19.2B in the last 12 months to Q3 2014, and institutional investors in mobile internet saw stock market sector returns of up to 78%. “While mobile internet investment is going mainstream, Digi-Capital’s Mobile Internet Investment Quadrant shows the best is yet to come,” said Digi-Capital Managing Director Tim Merel. (See all research in free 46 page summary and full 534 page Mobile Internet Investment Review Q3 2014 at www.digi-capital.com/reports).

$19.2B invested

Mobile internet companies took in a record $19.2B private investment (excluding IPOs) in the 12 months to Q3 2014, up 232% on the corresponding year to Q3 2013. The big money went into mCommerce ($4.2B), travel/transport ($3.3B), utilities ($1.8B) and games ($1.1B), with 10 other mobile internet sectors raising over half a billion dollars each (food & drink, enterprise/B2B, social, tech, advertising/marketing, messaging, medical, photo & video, music and finance). (All transactions detailed in full Review)

Mobile internet investment - $19.2B invested

Up to 78% stock market returns

Institutional investors have seen their faith in mobile internet justified, with the Digi-Capital Mobile Internet Index of 78 public companies in and around mobile internet giving a 28% return in the last 12 months. There have been strong performances across the 15 individual Mobile Internet Sector indices, with Travel/Transport (78%), Social Networking (45%), Navigation (43%), Messaging (40%) and Games (39%) outperforming the All Mobile Internet (28%) return, and Tech (27%) just below it. Sectors underperforming the main index include Lifestyle (13%), Food & Drink (3%), Enterprise/B2B (-4%), Music (-5%), Entertainment (-23%), mCommerce (-43%), AppStore/Distribution (-51%), Advertising/Marketing (-56%) and Utilities (-67%).” (All 78 public company and individual sector research in full Review)

Mobile internet investment - public market returns

Mobile Internet Investment Quadrant opportunities

Past success is not always a good guide for future investment in any sector, so the Digi-Capital Mobile Internet Investment Quadrant highlights opportunities where revenue outperforms investment/consolidation activity (see Methodology). There are Major Opportunities in mCommerce, AppStore/Distribution, Advertising/Marketing, Enterprise/B2B, Wearables, Business, Education and Books, with Hidden Gems in Navigation, Games and Entertainment, and Exit Opportunities in Social. Selective Opportunities remain in Health & Fitness, Music, Photo & Video, Messaging, Lifestyle, Travel/Transport, Utilities and Finance. The analysis does not guarantee any one sector or company will be a good or bad investment. (All analysis detailed in full Review)

Mobile Internet Investment Quadrant

“There have been lots of big numbers already, but for Mobile Internet investors the best is yet to come,” said Merel.

This is the second part of a three parts series for Q3 2014:

  1. 32 “billion dollar” mobile internet companies worth total $163B added $11B value in Q3 2014 ($125M a day);
  2. Mobile internet investment: record $19.2B invested, stock market sectors return up to 78% in last 12 months; and
  3. The 9 best exit returns in mobile internet: $94B exits in 12 months to Q3 2014, up to 15.6x VC/growth equity return on investment.

About Digi-Capital (www.digi-capital.com): Digi-Capital advises mobile internet, games and digital clients in America, China, Japan, South Korea and Europe for investment banking (M&A, investments), management consulting (strategy, due diligence) and industry research (mobile internet, games)

Contact: info @ digi-capital.com