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Slide 1: present Compelling Mobile Business Models January 12, 2008 Keynote: Jeff Glass - Bain Capital Ventures Ajay Agarwal - Bain Capital Ventures Speakers: Bryan Barletta, Director of Marketing - AppVee Mihael Mikek, President and CEO – Celtra Casey Jones, VP of Business Development – MocoSpace Jorey Ramer, Founder and VP Corporate Development – Jumptap David Nowicki, VP Marketing and Product Management – Airvana Mark Lowenstein, Mobile Ecosystem
Slide 2: Boston Mobile Cluster Map
Slide 3: Boston Mobile Investment 2002 – 2008 in millions 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007 2008
Slide 4: Boston Mobile Investment by 2008 Quarter 200 180 160 140 120 100 80 60 40 20 0 Q1 Q2 Q3 Q4
Slide 5: Total Boston Mobile Companies Receiving Venture Funding in 2008 50 45 40 35 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008
Slide 6: Bain Capital Ventures Mobile Startup Landscape Ajay Agarwal & Jeff Glass, Managing Directors Mobile Monday, Langham Hotel, Boston January 12, 2009
Slide 7: Mobile Startup Landscape Introduction Global Venture Capital Mobile Financing $8B $6B $6B $5B $4B $4B $2B $0B 2004 2005 2006 Bain Capital Ventures Source: Rutberg & Co. Wireless Industry Newsletter, Dec ‘08 Mobile Monday Deck 7
Slide 8: Mobile Startup Landscape Introduction Lemming University Bain Capital Ventures Mobile Monday Deck 8
Slide 9: Mobile Startup Landscape Introduction Global Venture Capital Mobile Financing $5.0B $4.9B $4.0B $3.6B $3.0B $2.0B $1.0B $0.0B 2007 2008 ? 2009 Mobile Monday Deck 9 Bain Capital Ventures Source: Rutberg & Co. Wireless Industry Newsletter, Dec ‘08
Slide 10: Mobile Startup Landscape Since our founding in 1984, Bain Capital has been an extremely active early stage investor and has a deep track record in the mobile space Introduction About Bain Capital Ventures Our Early-Stage Focus • First investment was a $600,000 seed investment in Staples • Seed investors in Aspect Development, which was ultimately sold to I2 in 2000 for $9B • Other early stage venture successes include DoubleClick, Shopping.com, eCredit, and Taleo (TLEO) and Staples • Over the years, Bain Capital has made more than 60 early stage investments • Today, we has over 25 active early stage companies in our portfolio Our Value to the Entrepreneur • Unparalleled Access to the Fortune 2000 and 350+ portfolio companies across Bain Capital, yielding valuable customers and partnerships • People – our 30-person Venture team allows us to take an active, engaged role in partnering with entrepreneurs • Analytical Approach – we offer deep strategic and operational experience Our Mobile Portfolio (acquired by VeriSign) Bain Capital Ventures Mobile Monday Deck 10
Slide 11: Mobile Startup Landscape The mobile ecosystem is undergoing systemic change Market Overview 1 2 The network is becoming commoditized, and voice ARPU is dropping rapidly. In fact, it has dropped 19% since Q1 2005. Smartphone penetration is increasing and operating systems are becoming more open, lead by OS X, Android, Symbian and Blackberry. This is leading to the proliferation of mobile application development. The balance of power is shifting from carriers to operating system providers as they become the gatekeeper to the phone and the consumer. Apple, Google, and RIM have now all launched app stores where they decide which applications can participate, not the carrier. The market is expanding as Smartphones become a viable laptop replacement New form factors such as Mobile Internet Devices, navigation devices, digital cameras, and e-readers are starting to include Wi-Fi capability. Mobile phones are continuing to replace landlines, and new technology such as femtocells and Wi-Fi enabled mobile phones will only heighten this trend. The net result will be an expanded market for mobile data services, and an opportunity for new startups. Although the market for these services is projected to be large, it’s not clear how revenue will be shared amongst participants, which leaves room open for new and innovative business models. 3 4 5 Bain Capital Ventures Mobile Monday Deck 11
Slide 12: Mobile Startup Landscape Historically, the bulk of acquisition dollars have gone to service providers, infrastructure software developers and hardware designers… Voice-C entric Ecosystem • Historically, carriers controlled the mobile ecosystem because they: – Owned the relationship with the consumer Business Models Historical Acquisition Activity 100% $99.8B Other $19.1B Tower Enterprise Software Semiconductor Content Consumer Indirect Application Consumer Direct Application – Determined handset subsidies – Controlled application availability 80% Transaction Value This meant that their priorities were those that were rewarded… • Carriers competed with each other based on: – Network Coverage – Network Quality – Price (Early to late ‘90’s) (Late ’90’s to mid ’00’s) (Mid ’00’s to current) Telecomm Provider 60% Network Infrastructure 40% Carrier Hardware 20% Infrastructure Software 0% Therefore, companies that enabled increased coverage, increased quality, or lower pricing thrived… Bain Capital Ventures Source: CapitalIQ, Bernstein Research – Nokia, July ‘08 Mobile Monday Deck 12 Note: 1. Exits are for Wireless / Mobile / Cellular companies in US / Canada or Developed Europe backed by a financial sponsor acquired for > $100mm btwn. 1/1/00 and 1/1/07 as of 1/1/09. 2. Consumer Indirect Applications are applications purchased by Carriers / Handset manufacturers and preinstalled on phone while Consumer Direct applications are sold directly to the consumer.
Slide 13: Mobile Startup Landscape However, as the landscape changes, priorities are shifting towards data services, and over the past two years companies that enabled such services have seen success… Data-Centric Ecosystem Business Models Recent Acquisition Activity Wireless/Mobile Exits (2007 – 2008) 100% $38.5B $22.1B Infrastructure Software Network Infrastructure Consumer Direct Application Content • Mobile penetration in developing countries is reaching saturation • Voice ARPU is declining → Carriers must increase Data ARPU to Transaction Value Tower Enterprise Software Consumer Platform Consumer Indirect Application 80% Other Semiconductor Hardware 60% grow • Concurrently, as handset manufacturers try to maintain pricing, they are changing their focus from handset design to improving handset feature sets. → Therefore, the emphasis is shifting to data-centric offerings including navigation, music, video, internet, and games. 40% Telecomm Provider Data Provider 20% Carrier 0% Over the past two years, service providers represented only 43% of total acquisitions, with data oriented assets making up the bulk of the rest Bain Capital Ventures Source: CapitalIQ Note: 1. Exits are for Wireless / Mobile / Cellular companies in US / Canada or Developed Europe backed by a financial sponsor acquired for > $100mm btwn. 1/1/07 and 1/1/09 as of 1/1/09. 2. Consumer Indirect Applications are applications purchased by Carriers / Handset manufacturers and preinstalled on phone while Consumer Direct applications are sold directly to the consumer. Mobile Monday 13 Deck
Slide 14: Mobile Startup Landscape Over the past two years, successful exits in the mobile data space have included mobile platforms, data assets, enabling technologies, Date Target Buyer Transaction Value (M) and access points… Mobile Platforms 2/11/2008 6/24/2008 1/2/2008 Danger, Inc. Symbian Limited Apertio Limited Microsoft Corporation Nokia Corp. Nokia Siemens Networks Oy Total $714.3 $264.0 $140.0 $1,118.3 $8,003.0 $2,824.7 $260.0 $11,087.7 $278.7 $161.9 $113.8 $286.8 $226.0 $134.3 $110.0 $1,311.5 $330.0 $275.0 $246.1 $851.1 Developer of Sidekick mobile platform Developer of Symbian mobile operating system Developer of subscriber-centric mobile network platform Business Models Recent Acquisitions Data Assets 8/28/2007 7/23/2007 4/22/2008 NAVTEQ Corp. Tele Atlas NV Gracenote, Inc. Nokia Inc. TomTom NV Sony Corporation of America Total North American and European digital map database and associated technologies Global digital map database and associated technologies Music track database and associated technologies Enabling Technologies 11/8/2007 8/24/2007 5/21/2007 6/21/2007 6/12/2007 12/13/2007 12/21/2007 Coding Technologies AB Hantro Products Oy Global Locate, Inc. GloNav, Inc. Dolby Laboratories Inc. On2 Technologies Inc. Broadcom Corp. NXP B.V. Total Chipidea Microelectrónica S.A. MIPS Technologies Inc. Centrality Communications, Inc. SiRF Technology Holdings Inc. u-NAV Microelectronics Corporation Communications Inc. Atheros Audio / Video Codecs Navigation Semiconductors Access Points 10/23/2007 11/6/2008 10/21/2007 Navini Networks, Inc. Wayport, Inc. LGC Wireless, Inc. Cisco Systems, Inc. AT&T, Inc. ADC Telecommunications Inc. Total Broadband wireless access solutions Public Wi-Fi access points In-building wireless / voice access Bain Capital Ventures Source: CapitalIQ Mobile Monday 14 Deck
Slide 15: Mobile Startup Landscape During 2008, investment in mobile applications has increased… Global Venture Capital Mobile Financing 100% Carrier Business Models Financing Activity Future Opportunities • The groundwork for mobile data services and applications is still being laid, and therefore the business models that have already been successful are those that: – 1 Provide the underlying technology $5.4B $6.4B $5.1B $3.6B 80% Semiconductor Dollars Invested Enterprise Infrastructure Device 60% for building mobile data services 2 Help the mobile data market to – inflect rather than depending on the underlying infrastructure being in place Government Application Enterprise Application Carrier Application Consumer Application Carrier infrastructure 40% 20% • However, Venture Capital inflows into mobile application companies have increased over the past year – Although overall investment in mobile was down, the percent being allocated to applications increased significantly. – Investors are ready to help build the next layer of mobile businesses 0% 2005 2006 17.9% 3.6% 2007 16.3% 7.9% 2008 23.0% 13.7% Application as % of 12.1% Total Consumer Application 2.6% as % of Total Bain Capital Ventures Sources: Rutberg & Co. Wireless Industry Newsletter, Dec ‘08 Notes: Carrier Applications are those sold through carrier decks, while Consumer Applications are those sold directly to consumers. Mobile Monday 15 Deck
Slide 16: Mobile Startup Landscape We believe that the opportunity to build a business in mobile is as strong as ever, and that there are a multitude of new opportunities for startups trying to be innovative… Conclusion 16 Mobile Monday Deck
Slide 18: What is AppVee? • iPhone and Android application reviews • Exclusive focus on video • Filter gems from garbage for iPhone and Android users • Based on merit, not price or downloads • Professionally reviewed and researched • We find what you should know about
Slide 19: Business Model 1) Advertising – On website • AppVee.com – 700,000 pageviews/mo – 100,000 uniques – On App • iPhone • Over 150,000 downloads • 1M+ Ad Impressions • ~10,000 Daily uniques • AndroidApps.com – 250,000 pageviews/mo – 30,000 uniques – Above the fold (5, rotating) – Featured App • Android • Coming Soon • Top, sticky, rotating • High CTR (up to 1.8%)
Slide 20: Business Model 2) Affiliate Sales – 5% affiliate fee via LinkShare – Sold tens of thousands of dollars of applications – Much higher on the iPhone app than website
Slide 21: Business Model 3) Video Ad Share – YouTube • YouTube Partner within 3 months – 5min • 5min Partner from start
Slide 22: Mobile Challenges • Exposure, exposure, exposure • Gatekeeper restrictions – Rising number of applications = lost in the crowd – Where does Apple draw the line? – Does Google’s lack of gatekeeping hurt it? – More developers, more apps, higher consumer expectation – Is technology affected? Yes and No – When will consumers say enough is enough? • Circle back to exposure • AppVee is one solution focused strictly on solving this problem • Rising development costs • Economic environment • Market saturation
Slide 23: Where is mobile headed? • Games that rival the Nintendo DS and Sony PSP • Social gaming • Multi-user applications • Mobile ports of desktop apps • Deeper integration with other devices around us • More cloud support and desktop syncing
Slide 24: Thanks! Thanks! www.AppVee.com
Slide 25: Miha Mikek MoMo Boston, January 2009
Slide 26: Celtra is a mobile marketing enabler and a value-added aggregator tarted operations in 07, team of 5, self-funded e offer Software-as-a-Service mobile marketing platform (engagement marketing) Development platform for marketers (ad-agencies, brands, service providers) SMS, MMS & IVR based campaigns (pers. calls, SMS alerts, coupons, content, comments, trivia, voting, games) Modular, customizable mobile features and content mgmt. offer creative freedom It enables integrated marketing campaigns (online and mobile convergence)
Slide 27: 2.1. – Solution Celtra enables integrated marketing campaigns that utilize mobile channel “there's quite a bit of research out there that's shown existence of mobile in a campaign ... has improved both the response and the interaction rates of the online media.” Eric Bader, Brand in Hand
Slide 28: ulti-channel campaign distribution provides costfficiency and audience reach
Slide 29: Celtra enables fast and efficient campaign creation, deployment and distribution evelopment of campaigns without knowledge in technical aspect of mobile marketing urn-key solution for agencies and brands educed costs and “time to market” for deployment of marketing campaigns ew, innovative mobile solutions for integrated marketing campaigns ignificantly better performance (conversion, click-through) compared to traditional promotional channels
Slide 30: Case: Notorious movie promotion nline widget / Facebook app howtimes widget / WHERE™ iPhone app
Slide 31: One out of three “Sex and The City” widget impressions generated a subscription to SMS tips from Carrie Bradshaw "Text and The City” campaign offered daily SMS tips form Carrie Bradshaw. Widget was promoted from the official movie web site www.sexandthecitymovie.com ampaign results (conversion rate) pt-in for SMS alerts: 33% idget installs to personal profiles: 25%
Slide 32: 5.2. – Inside the platform / Feature module
Slide 33: 4.2. – Inside the platform / Feature module
Slide 34: MoM o Jan uary 1 2 Casey Jones
Slide 35: Company Snapshot The largest mobile social network in the US, with over 5.2 million registered users and over 2 billion pages per month #1 Mobile Entertainment site (Hitwise) - # 4 mobile search on AOL - Top 3 mobile site in US (Opera) founded in 2005 by mobile industry veterans and long-time best friends, Jamie Hall and Justin Siegel 24 Employees in Boston and Israel +$7 million raised from General Catalyst, Comerica, Pilot Group, retired eBay exec Michael Dearing www.mocospace.com
Slide 36: These are the “Year of Mobile” Mobile Web has the momentum. . . growing 8X faster than Wired web – Nielsen (UK) . . . With Mobile Social driving the mobile web In U.S., 100 million mobile web users and 40 million mobile social users by 2012 - eMarketer www.mocospace.com
Slide 37: The First Screen for Trendsetters Young and Diverse Average Age: 21 52% Male 48 % Female 33% African American 33% Hispanic 33% Caucasian 92% US & Canada Highly Engaged Average sessions per day: 1.48 Average pages per session: 108 Average session time: 45 minutes Average # of friends per user: 60 Average pages per user per month: 1529 www.mocospace.com
Slide 38: What’s Working? • Ad Supported Model – mobile and web – JumpTap, Quattro, Third Screen, Nokia Direct Deals – Kmart, Verizon Wireless, LionsGate Viral, WOM Growth – 5 million e-cards over Holidays Entertainment partnerships – Island Def Jam – SonyBMG – EMI – SRC • • • www.mocospace.com
Slide 39: Diversifying Revenue Streams Display Advertising Banners Sponsorships CPM/CPC/CPA Commerce Ringtones Games Classifieds Messaging SMS Premium Services Virtual Goods “Bonus” features
Slide 40: Keys to Growth • Great Product / Member Experience – authenticity • Flat Rate Data Plans – keep activity affordable – MetroPCS, Cricket, Virgin Mobile • Smartphones driving mobile web browsing • Lower barriers for publishers help mobile web flourish • $100 for mobile web page vs. short code $$$$ • Driving usage and mainstream appeal www.mocospace.com
Slide 41: www.mocospace.com
Slide 42: Compelling Mobile Business Models Jorey Ramer Founder & VP Corporate Development Mobile Monday January 12, 2009 © 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary © 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary
Slide 43: Who We Are The global leader in mobile search and advertising solutions Enable search and advertising for 16 operators in 9 countries and hundreds of mobile websites and applications © 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary
Slide 44: Evolution since inception © 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary 44
Slide 45: Impact of economic environment Percentage Of Ad Budgets Expected To Change Over Next Six Months Increase Maintain Decrease Online 68% 25% 7% Mobile 51% 37% 12% Cable TV 27% 49% 24% Magazines 18% 47% 35% Outdoor 17% 54% 30% Broadcast TV 16% 51% 33% Radio 16% 49% 35% Local Newspapers 11% 47% 42% National Newspapers 9% 43% 48% Source: Advertiser Perceptions Inc. Fall 2008 report. Advertising executives surveyed in October and November 2008. © 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary 45
Slide 46: Where mobile advertising is headed (or why mobile will be the Internet on steroids) Personal nature of medium Location based Interactive Exchange real value with user Take phone everywhere Targetable © 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary 46
Slide 47: Thank you JumpTap: Top 15 Innovator 2007 JumpTap: 2007 Mobility Award for Entrepreneurial Company JumpTap: AO Media Top 100 Companies 2007 JumpTap: Best Advertising & Marketing Search Engine 2008 JumpTap: Ten Emerging Mobile Players to Watch in 2007 For more information, contact: Jorey Ramer Vice President, Corporate Development +1 617-817-1334 Jorey.Ramer@jumptap.com © 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary
Slide 48: Airvana Mobile Monday Event Compelling Mobile Business Models David Nowicki Vice President, Marketing and Product Management January 12th 2009 Stay informed: www.femtohub.com
Slide 49: Airvana At a Glance • Company Facts – Founded 2000: NASDAQAIRV – HQ in Chelmsford, MA, USA with offices in EMEA, Asia Pacific and the Americas – Over 500 employees – 2007 Billings: $142M Internet Protocol • Market Focus – IP Wireless Networks (RAN) – Fixed Mobile Convergence (FMC) pioneer • HubBub™ Femtocell • Universal Access Gateway – Products deployed in 70 operators on six continents Mobile Broadband 49
Slide 50: Partnerships for the Transformed Mobile Ecosystem CORE INFRASTRUCTURE CONSUMER DEVICES RADIO ACCESS INFRASTRUCTURE STANDARDS 50
Slide 51: First Business: CDMA 1xEV-DO IP-RAN IP-RAN SOLUTION IP-RAN SOLUTION • IP-RN EV-DO Base Station • IP-RNC Radio Network Controller • AirVista Element Management System • IP-RN EV-DO Base Station • IP-RNC Radio Network Controller • AirVista Element Management System AIRVANA ADVANTAGES • IP-RAN architecture optimized for mobile broadband • Consistent fast delivery of EV-DO roadmap • Rev A VoIP with QoS • Non-disruptive upgrade path to EV-DO Rev B and beyond AIRVANA ADVANTAGES • IP-RAN architecture optimized for mobile broadband • Consistent fast delivery of EV-DO roadmap • Rev A VoIP with QoS • Non-disruptive upgrade path to EV-DO Rev B and beyond 51
Slide 52: Today: Drivers and Barriers of Mobile Services Unrealized In-Home Market Spotty Coverage Poor Data Performance High Costs & ARPU Challenges 3G Services Device Innovation 52
Slide 53: Emerging Business: Enter The Femtocell Issue Coverage Data Performance CAPEX/OPEX Femtocell Impact Base station for the home Dedicated capacity; all the bandwidth you need Delivery of mobile services far less expensive via femtocells than over macrocell infrastructure Potential for increased usage, reduction in churn & uplift from femtozone services “Enter the femtocell: a little box with a whole lot of promise.” Fox News, November 2007 ARPU 53
Slide 54: Femtocells Transform The Mobile Network MACRO ACCESS HubBub™ Femtocell Mobile Core Network Internet Femtocell and Dual-Mode Access Universal Access Gateway (UAG) Wi-Fi HubBub™ Femtocell 54
Slide 55: Femtocells Drive The Digital Home Era PERSONALIZED APPLICATIONS Home Zone Plan 3G phone Home Zone menu HOME CONTROL Video Surveillance Alarms FAMILY COMMUNICATION Presence-enabled applications Intercom Virtual home number DIGITAL HOME & ENTERTAINMENT Music and video Gaming Home Menu 55
Slide 56: Summary How When Who Why Where • • • • • • • • • • 56 Infrastructure Software licensing Femtocell Devices and App Enablers Existing: Mobile Broadband Infrastructure Emerging: Femtocells (FMC) Mobile OEM Channels & Operators Consumers Mobile Broadband. Everywhere. Transforming the User Experience Realizing the full potential of the mobile device Femtocell at the center of the digital home
Slide 57: Thank You Stay informed: www.femtohub.com