$100B mobile exits as investments/valuations peak in 2015

February 8, 2016

Digi-Capital Mobile Internet Unicorns Q4 2015

It’s hard to call the top of an investment market, but the massive numbers around mobile internet in 2015 have a tale to tell. 102 mobile internet unicorns became worth $1 trillion after adding $130 billion value in Q4 2015, but 4 mobile unicorns died (i.e. dropped below $1 billion). There was over $100 billion of mobile internet exits, as consolidation kicked into overdrive while IPOs cooled. $69 billion was invested into mobile internet last year, but investment dropped over 20% in Q4 2015 after 9 straight quarters of growth. Finally the mobile internet stock market of 92 companies across 16 sectors was flat for the year.

Every exit is an entry somewhere else

Digi-Capital Mobile Internet Deals 2015

The $69 billion invested in mobile internet in 2015 was extraordinary, peaking in Q3 at $21 billion before dropping back to $16B in Q4. Mobile travel/transport and mCommerce took around 2/3 of all investment, with multiple billions poured into lifestyle, food & drink and advertising/marketing. Hundreds of millions went into 21 other mobile sectors.

The exit market (M&As + IPOs) was relatively stable during the first 3 quarters of 2015, but hit a record $101 billion for the year driven by massive consolidation in Q4. A combination of large scale mergers and acquisitions at the end of the year drove mCommerce and travel/transport to half the exit market, with multiple billions of exits in mobile utilities, photo & video, games, wearables, social, navigation, food & drink, weather, advertising/marketing and education. Hundreds of millions of exits came out of 8 other mobile sectors.

My little pony

Digi-Capital Mobile Internet Unicorn Valuations Q4 2015

Marc Andreessen and Bill Gurley’s ongoing debate about flying and dead unicorns remained unsettled at the end of last year. 102 mobile internet unicorns added $130 billion value in the fourth quarter to hit $1 trillion for the first time. Four mobile internet unicorns also fell below the magical $1 billion mark. So they’re both right (for now).

Mobile social networking and mCommerce took 2/3 of all the value, followed by mobile transport, finance, messaging, games, utilities, travel, food & drink and 13 other billion plus sectors. US mobile internet unicorns were worth around half the total, with China rapidly catching its western counterpart. The rest of the world’s mobile internet unicorns combined were worth just over 1/10 of the total, so this was a two horse race.

Up, down and sideways

Digi-Capital Mobile Internet Stocks LTM to Q4 2015

The mobile internet stock index of 92 publicly listed companies across 16 sectors was broadly flat for 2015 (down 0.5% for the year), with performance ranging from 48% up to 31% down by sector. The start of 2016 has also seen some major losses, particularly in recent weeks.

Destination unknown

Last year saw the biggest numbers ever for mobile internet, but the changes in direction across investments, M&As, IPOs and valuations (both private and public) are hard to ignore. There’s a lot riding on what happens next, and the big question is whether 2016 will be a year for turnaround, soft landing, or major correction. Numbers don’t lie, so watch this space when we report again next quarter.

You can read more in tech M&A advisor Digi-Capital’s new Mobile Internet Report 2016 and mobile internet deals database of 8,000+ investments, M&As and IPOs across 27 mobile internet sectors.