The latest analysis from Digi-Capital shows that Mobile internet exits hit $101B in 2015, which is fantastic news for the industry. However, looking back on our last analysis of Digi-Capital’s Mobile Internet statistics from q4 2015, it is clear that, while there is still plenty of life and money in the industry, the unprecedented growth that we were seeing before is no longer prevalent, with consolidation, and the odd failure, being the order of the day.
This is not to say that there is an impending bubble. In fact, this could be a good thing. When valuations are skyrocketing, it can be disconcerting, as it can seem like people are hopping on a bandwagon, rather than valuing companies at levels that more truly reflect their worth. In the latest analysis, there is reference to four mobile unicorns that have fallen below the $1B valuation mark, showing that some companies were indeed overvalued, and are now struggling to justify that valuation. Despite that caveat, however, the report also states that 102 mobile unicorns added $130m value in the fourth quarter of 2015, making the combined value over $1T for the first time.
One interesting difference between the two reports, is the different sectors of mobile internet that saw Exits. While both saw a large spread of different areas, the main sectors in the year up to q4 2015 were messaging, games, and Social networking (with messaging given a large boost from Facebook’s acquisition of WhatsApp), with the three sectors making up almost 2/3rds of exits. The latest figures show that mCommerce (just 1% in the previous figures we analysed) and Travel/transport (1.3%) made up almost half of exits. This perhaps shows that the Messaging, Games and Social Networking spaces are saturated at the top end, whilst there is still seen to be room for growth in mCommerce and travel. Part of this might be due to the broad nature of mCommerce, which differs from Social Networking or Messaging as there are countless different uses for mCommerce, whereas people will only use a certain amount of messaging or Social Networking.
The mobile internet stock index of 92 publicly listed companies shown in the Digi-Capital report shows that it was broadly flat in 2015, with navigation companies growing by 48% and Entertainment shrinking by 31% being the biggest variables. Overall, value was down 0.5% over the year, which again tallies with our analysis that it has been a year of consolidation rather than massive growth. It will be fascinating to see how 2016 turns out.
