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Mobile Applications – Market Evaluation and
Opportunities

prepared for b-to-v Core Croup Internet and Mobile




St. Gallen, March 2009
Agenda

1. Recent Developments and Trends


2. Market for Mobile Applications

3. Recent Investment Activity in the Mobile Space


4. Blueprint of an attractive Investment in Mobile Applications


5. About b-to-v




                                                                  p. 2
Trends for mobile applications

–   Open Platforms:
    New development frameworks focus stronger on web technology (Apple
    iPhone, Palm Pre). Hence, easier deployment of applications that do not be
    customized for each mobile, such as with J2ME or Symbian.
–   Open Shops:
    Strong limitation of former operating systems in distribution of applications.
    Changing environment with Application Stores of Platform Manufacturers (e.g.
    Apple App Store for iPhone) or Download Platforms, such as GetJar
–   Payment:
    Easier setup of transaction-based business models with higher revenue shares
    for developers



          Creating a new Ecosystem for developers


                                                                                     p. 3
Fostered by an improved environment

–   Broadband Speed:
    Higher penetration of 3G+ in developed countries allows PC-like surfing behavior
    on mobile phones plus broader WiFi coverage.
–   Flatrate data plans:
    User having more cost control on their data usage with flatrate plans or at least
    much cheaper data plans with high volume.
–   Better handsets:
    More elaborate smartphones with more convenient usability (e.g. touch screens)
    becoming more accessible to the mass market, esp. the ones based upon low-
    cost open source operating systems, such as Android.




                                                                                        p. 4
Business models shifting to Device Manufacturers

–   Former portals of mobile operators’ (MNOs) have not appealed to consumers
–   Only new capabilities and functionalities of smartphone handsets haven driven
    up mobile internet usage significantly
–   Device Manufacturer become more independent from MNOs and are able to
    dictate the terms (e.g. exclusive distribution of iPhone with selected MNOs)
–   Manufacturers are actively fostering this new ecosystem through own venture
    activities (iFund, Blackberry Partners Fund, Android Developer Challenge are the
    most recent ones with over USD 250m+ funding volume), previous activities
    from Nokia, among others




                                                                                       p. 5
Agenda

1. Recent Developments and Trends


2. Market for Mobile Applications

3. Recent Investment Activity in the Mobile Space


4. Blueprint of an attractive Investment in Mobile Applications


5. About b-to-v




                                                                  p. 6
Development of worldwide handset market

–       In 2008, 1.27bn new mobile handsets shipped worldwide, thereof 14% smartphones
–       Nokia being dominant market leader with nearly 40% worldwide market share overall
–       However, in strong growing smartphone segment loosing market share to Apple and RIM
        (in 2008 Apple alone sold 13.7m iPhones)




    Sources: ABI Research (2008), Gartner (2008)
                                                                                              p. 7
Game-changing iPhone in mobile internet usage

–       The iPhone significantly has driven customer attention to the mobile web, even
        stronger expected with greater 3G coverage
–       No other device is used more for web search, email, music and social networking
–       Hence, mobile internet usage is becoming a mass market phenomena– partly
        thanks to the iPhone: Alone in Germany 20% (worldwide 16%) of mobile
        subscribers are using the mobile internet, in the US even 35% do so daily




    Sources: ComScore (2008/2009), TNS (2009)
                                                                                         p. 8
Consumption Patterns of Content and Applications

–       In part due to social networking and internet commerce, smartphone users are spending an
        average of more than 4.6 hours per month browsing the mobile web in the US and nearly
        2.5 hours per month in the UK
–       Thereof, in the UK user spent alone 1h 44min per month browsing on Facebook
–       Content looked for in the mobile internet: 1) Search, 2) News, 3) Music, 4) Social Networking,
        5) Weather and 6) Sports (according to TNS survey)




    Sources: M:Metrics (2008), TNS (2009)
                                                                                                     p. 9
iPhone App Store: From 10k to 20k+ apps in 73 days

–       Most efficient ecosystem for mobile apps worldwide (over 25k apps listed as of mid Mar 09)
        with very dynamic pricing (mostly expressed in price reductions)
–       Since launch of App Store in July 08 in total 1.2k applications were pulled for various reasons
–       Over 1/3 of apps are in Gaming and Entertainment, about 75% of all apps are paid-apps
                                                                    Games
                                                                    Entertainment
                                                                    Utilities
                                                                    Education
                                                                    Productivity
                                                                    Lifestyle
                                                                    Healthcare and Fitness
                                                                    Books
                                                                    Reference
                                                                    Travel
                                                                    Sports
                                                                    Music
                                                                    Navigation
                                                                    Business
                                                                    Finance
                                                                    Social Networking
                                                                    News
                                                                    Photography
                                                                    Weather
    Source: iPhone App Store USA (as of end Nov 08)
                                                                                                     p. 10
Most downloaded iPhone apps

–       Overall 800m downloads as of mid Mar 09 (up from 500m end of 08), thereof about 25%
        Games
–       Recognition only through listing on “Top 25/100” (at least 20k/5k downloads needed)




    Source: iPhone App Store USA (as of end of 08)
                                                                                              p. 11
But no sustained usage – for both free and paid apps

–       For free/paid apps, only about 20/29% of users return after the first day after they
        downloaded it. By 30 days out, less than 5/3% are using the app.
–       By category, entertainment and gaming apps seem better to retain an audience over a
        longer time.
–       In terms of time spent gaming apps reveal 2x higher engagement than other categories.




    Source: Pinch Media (Feb 09), based on 30m+ downloads
                                                                                                p. 12
Leaving questions open for the right business model

–       Assumption: Free apps are used 12 sessions per user and run 6.6x as often as paid apps
–       Compared to the average of USD 0.70/user for paid apps a free app with this assumed
        80 sessions would need to command at least a CPM of USD 8.75 in order to earn through
        advertising (one ad per session) as much as a paid app on a per user basis
–       However, current iPhone app ad rates are between USD 0.50 and USD 2.00 CPM
–       Conclusion: Only <5% of apps are suitable to make money through advertising


–       Open questions for the right business model:
           –      Charging for apps might to seem better at first
           –      Trying to make the app more sticky, and hence increase usage
           –      Benefiting from network effects in order to attract more users
           –      Targeting the right users in order to command higher CPMs



    Source: Pinch Media (Feb 09), based on 30m+ downloads
                                                                                                 p. 13
Agenda

1. Recent Developments and Trends


2. Market for Mobile Applications

3. Recent Investment Activity in the Mobile Space


4. Blueprint of an attractive Investment in Mobile Applications


5. About b-to-v




                                                                  p. 14
Analysis of venture investments in mobile space (1/2)

–       Tracking worldwide mobile-related VC investments from June 07 to Feb 09
–       In total 360 deals, thereof 159 in Mobile Apps and 31 in Mobile Advertising
–       Average investment per deal in Mobile Apps USD 8.5m, in Mobile Advertising
        USD 10m respectively
–       With regard to newly established funds of manufacturers an increased deal
        activity can be seen with significant average investments per deal, e.g.
            –      iFund (in cooperation with KPCB): USD 6.85m (6 deals done to date)
            –     Blackberry Partners Fund: USD 5.7m (3 deals done to date in mobile apps)
            –     Android Developer Challenge: USD 187.5k (20 projects funded to date)




    Source: Own analysis
                                                                                             p. 15
Analysis of venture investments in mobile space (2/2)

–       More mobile apps in entertainment* and with social neworking features
        attracted funding than apps in other categories; productivity apps being the
        third most important category
–       Location-based features complement more and more funded mobile apps
                                                                              Entertainment
                                                                              Social Networking
                                                                              Productivity
                                                                              Location-based
                                                                              Gaming
                                                                              eCommerce
                                                                              Video
                                                                              Music
                                                                              Communication
                                                                              Photography
                                                                              Security
                                                                              Travel
                                                                              Search
                                                                              Money
                                                                              Sports


    * Entertainment category also comprises lifestlye apps, such as dating.
    Source: Own analysis (double entries possible for categories)
                                                                                                  p. 16
Selected mobile apps in Entertainment and Gaming

                      –   Gaming apps with music and social features focussed on iPhone
                      –   Most popular game for iPhone and iPod touch in 2008 (total unique installs per month: 5m+,
                          100k paying customers as of Dec 08)
                      –   Business Model: Freemium model (free apps with advertising and paid apps) plus affiliate
                          revenues
www.tapulous.com
USA, Palo Alto (CA)   –   Financials / Funding: Break-Even in Dec 08 / funded with USD 1.8m from angel investors
                          (Andy Bechtolsheim, Marc Benioff, Jeff Clavier, Katrina Garnett, Khosla Ventures, among others)
                      –   Take-away: Addictive products create strong community for viral effects



                      –   Developer of premium 3D mobile games since 2004, business relationships to 160 mobile
                          operators worldwide
                      –   For iPhone and iPod touch significant number of downloaded games with high conversion
                          rate to premium
 www.fishlabs.de      –   Business Models: Channel sales via operatators and portals & direct sales such as through
  DE, Hamburg             download platforms (for App Store: freemium model)
                      –   Financials / Funding: funded by Neuhaus Partners and angel investors
                      –   Take-away: Direct sales activities on platforms have higher gross margin with greater upside
                          than through channel partners, they only recently peaked thanks to transaction model of the
                          App Store

                                                                                                                         p. 17
Selected mobile apps in Social Networking

                      –   Worldwide leading social network
                      –   180m active registered users, 220m unique users as of Dec 08 (thereof 20m via mobile
                          platforms); Facebook for iPhone/Blackberry has 5.4m/3.7m active users per month
www.facebook.com      –   Working on own mobile development kit for Facebook apps, recently introduced Facebook
USA, Palo Alto (CA)       Connect for iPhone allowing third-party apps to integrate with Facebook‘s social network
                      –   Business Model: Advertising
                      –   Financials / Funding: USD 300m revenue (2008e) / funded with USD 516m by Greylock, Accel
                          Partners, Microsoft, among others
                      –   Take-away: Social networking on mobile will be dominated by Facebook (followed by
                          MySpace), thus all major mobile operators are in cooperation discussions with Facebook

                      –   Mobile entertainment network with social networking features and multiplayer games (only as
                          Java app), operating since 2007
www.qeep.net
 DE, Cologne          –   1m registered users with high activity level (as of Feb 09)
                      –   Business Models: Advertising and premium features (item-selling, skill-gaming)
                      –   Financials / Funding: Advertising revenues since Dec 08/ funded by Bertelsmann (BDMI)
                      –   Take-away: Most users are in emerging markets, such as South Africa, Indonesia or India,
                          and as such offer only lower CPMs in advertising; hard to monetize through advertising solely



                                                                                                                          p. 18
Agenda

1. Recent Developments and Trends


2. Market for Mobile Applications

3. Recent Investment Activity in the Mobile Space


4. Blueprint of an attractive Investment in Mobile Applications


5. About b-to-v




                                                                  p. 19
Considerations for investments in mobile apps

–   Focus on social apps with an entertainment character (e.g. multiplayer games)
–   Productivity apps are mostly an extension of existing web services, otherwise an
    online interface is mandatory
–   Usage of phone's features (location targeting, accelerometer, camera etc.),
    especially for games
–   Need to create viral features and a high stickiness in order to foster distribution
    and extend usage




                                                                                          p. 20
Discussions of mobile apps development in general

–   Are mobile apps just extensions of existing web services?
–   Which applications cannot be substituted by online ones accessible through the
    mobile web browser? (just games?)
–   How scaleable are applications? Just one-trick ponies from garage developers
–   What is the upside potential of mobile apps? Compare recent sales of mobile
    apps, e.g. MindMaker to MindMeister
–   It is still difficult to find sustainable business models that scale. What are
    alternatives to mobile advertising? (subscription vs. transaction-based)
–   What will be the future strategy of Mobile Network Operators (MNOs)? M&A of
    traffic-rich apps?

          Specialization and portfolio of apps in this category
          needed for differentiation, critical mass and upside
          (e.g. in Gaming, Productivity or eCommerce)
                                                                                     p. 21
Agenda

1. Recent Developments and Trends


2. Market for Mobile Applications

3. Recent Investment Activity in the Mobile Space


4. Blueprint of an attractive Investment in Mobile Applications


5. About b-to-v




                                                                  p. 22
b-to-v at a glance

–   At the heart of what we do is the b-to-v Investorenkreis, an exclusive circle of
    entrepreneurial investors from Europe
–   b-to-v renders exclusive services to members of the b-to-v Investorenkreis, e.g. it
    enables the confidential sharing of investment opportunities, supports the
    processing and structuring of deals, and helps to manage and control
    investments
–   Admission to the b-to-v Investorenkreis is granted only to candidates who have
    proven their business acumen, investment expertise, and personal integrity
–   Our approach gives entrepreneurs the unique opportunity to discuss their
    ventures and financing needs with senior entrepreneurs, benefit from their
    experience, their networks, and receive funding from them




                                                                                       p. 23
Cornerstones of the b-to-v Investorenkreis


–   The b-to-v Investorenkreis has 54 members
–   Members come from various industry backgrounds (e.g. high tech, internet,
    telecom, clean tech), and have
      –   founded > 100 companies
      –   and have invested in > 1’000 deals
      –   sold > 300
      –   realized > 100 IPOs

–   In sum, the members’ annual direct equity investments volume amounts to
    EUR 20-25m




                                                                                p. 24
Co-Authors



Florian Schweitzer (Partner) co-founded     Alexander Stoeckel (Investment Manger)
b-to-v and built its network of private     holds an MBA from the University of
investors since 2000. He studied Business   Oxford. Prior to b-to-v, he worked as
Administration at the University of         fund-of-fund manager and as executive
St.Gallen.                                  management assistant.




Sven Eppert (Investment Manager)
studied Business Administration at the
Catholic University Eichstätt-Ingolstadt
and the Warsaw School of Economics.
Prior to b-to-v, he worked in asset
management and in consulting.

                                                                                p. 25
b-to-v overview

                            BrainsToVentures AG
                            Blumenaustr. 36 / P.O. Box 142                     Dr. Jan Bomholt, Partner and co-founder
                            CH-9004 St. Gallen
                                                                               Dr. Christian Schütz, Partner
Contact                     T: +41 71 242 2000
                                                                               Florian Schweitzer, Partner and co-founder
                            F: +41 71 242 2001
                            www.b-to-v.com                                     Christoph Schweizer, Partner
                            info@b-to-v.com


Dedicated people            54 members of the Investorenkreis
Core personnel              8 investment professionals
Deal flow p.a. (average)    1,500 business plans
Deals done p.a. (average)   20
Investment strategy         Opportunity driven
Geographical preferences    Europe, USA and Asia
Financing stages            Early stage, expansion stage, and later stage, as well as MBI and MBO projects
Most recent Exits           Three IPOs (XING, Codfarmers, Fidor) and three trade sales (Cycleon, myBet, Plazes)




                                                                                                                            p. 26

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Mobile Applications – Market Evaluation and Opportunities

  • 1. Mobile Applications – Market Evaluation and Opportunities prepared for b-to-v Core Croup Internet and Mobile St. Gallen, March 2009
  • 2. Agenda 1. Recent Developments and Trends 2. Market for Mobile Applications 3. Recent Investment Activity in the Mobile Space 4. Blueprint of an attractive Investment in Mobile Applications 5. About b-to-v p. 2
  • 3. Trends for mobile applications – Open Platforms: New development frameworks focus stronger on web technology (Apple iPhone, Palm Pre). Hence, easier deployment of applications that do not be customized for each mobile, such as with J2ME or Symbian. – Open Shops: Strong limitation of former operating systems in distribution of applications. Changing environment with Application Stores of Platform Manufacturers (e.g. Apple App Store for iPhone) or Download Platforms, such as GetJar – Payment: Easier setup of transaction-based business models with higher revenue shares for developers Creating a new Ecosystem for developers p. 3
  • 4. Fostered by an improved environment – Broadband Speed: Higher penetration of 3G+ in developed countries allows PC-like surfing behavior on mobile phones plus broader WiFi coverage. – Flatrate data plans: User having more cost control on their data usage with flatrate plans or at least much cheaper data plans with high volume. – Better handsets: More elaborate smartphones with more convenient usability (e.g. touch screens) becoming more accessible to the mass market, esp. the ones based upon low- cost open source operating systems, such as Android. p. 4
  • 5. Business models shifting to Device Manufacturers – Former portals of mobile operators’ (MNOs) have not appealed to consumers – Only new capabilities and functionalities of smartphone handsets haven driven up mobile internet usage significantly – Device Manufacturer become more independent from MNOs and are able to dictate the terms (e.g. exclusive distribution of iPhone with selected MNOs) – Manufacturers are actively fostering this new ecosystem through own venture activities (iFund, Blackberry Partners Fund, Android Developer Challenge are the most recent ones with over USD 250m+ funding volume), previous activities from Nokia, among others p. 5
  • 6. Agenda 1. Recent Developments and Trends 2. Market for Mobile Applications 3. Recent Investment Activity in the Mobile Space 4. Blueprint of an attractive Investment in Mobile Applications 5. About b-to-v p. 6
  • 7. Development of worldwide handset market – In 2008, 1.27bn new mobile handsets shipped worldwide, thereof 14% smartphones – Nokia being dominant market leader with nearly 40% worldwide market share overall – However, in strong growing smartphone segment loosing market share to Apple and RIM (in 2008 Apple alone sold 13.7m iPhones) Sources: ABI Research (2008), Gartner (2008) p. 7
  • 8. Game-changing iPhone in mobile internet usage – The iPhone significantly has driven customer attention to the mobile web, even stronger expected with greater 3G coverage – No other device is used more for web search, email, music and social networking – Hence, mobile internet usage is becoming a mass market phenomena– partly thanks to the iPhone: Alone in Germany 20% (worldwide 16%) of mobile subscribers are using the mobile internet, in the US even 35% do so daily Sources: ComScore (2008/2009), TNS (2009) p. 8
  • 9. Consumption Patterns of Content and Applications – In part due to social networking and internet commerce, smartphone users are spending an average of more than 4.6 hours per month browsing the mobile web in the US and nearly 2.5 hours per month in the UK – Thereof, in the UK user spent alone 1h 44min per month browsing on Facebook – Content looked for in the mobile internet: 1) Search, 2) News, 3) Music, 4) Social Networking, 5) Weather and 6) Sports (according to TNS survey) Sources: M:Metrics (2008), TNS (2009) p. 9
  • 10. iPhone App Store: From 10k to 20k+ apps in 73 days – Most efficient ecosystem for mobile apps worldwide (over 25k apps listed as of mid Mar 09) with very dynamic pricing (mostly expressed in price reductions) – Since launch of App Store in July 08 in total 1.2k applications were pulled for various reasons – Over 1/3 of apps are in Gaming and Entertainment, about 75% of all apps are paid-apps Games Entertainment Utilities Education Productivity Lifestyle Healthcare and Fitness Books Reference Travel Sports Music Navigation Business Finance Social Networking News Photography Weather Source: iPhone App Store USA (as of end Nov 08) p. 10
  • 11. Most downloaded iPhone apps – Overall 800m downloads as of mid Mar 09 (up from 500m end of 08), thereof about 25% Games – Recognition only through listing on “Top 25/100” (at least 20k/5k downloads needed) Source: iPhone App Store USA (as of end of 08) p. 11
  • 12. But no sustained usage – for both free and paid apps – For free/paid apps, only about 20/29% of users return after the first day after they downloaded it. By 30 days out, less than 5/3% are using the app. – By category, entertainment and gaming apps seem better to retain an audience over a longer time. – In terms of time spent gaming apps reveal 2x higher engagement than other categories. Source: Pinch Media (Feb 09), based on 30m+ downloads p. 12
  • 13. Leaving questions open for the right business model – Assumption: Free apps are used 12 sessions per user and run 6.6x as often as paid apps – Compared to the average of USD 0.70/user for paid apps a free app with this assumed 80 sessions would need to command at least a CPM of USD 8.75 in order to earn through advertising (one ad per session) as much as a paid app on a per user basis – However, current iPhone app ad rates are between USD 0.50 and USD 2.00 CPM – Conclusion: Only <5% of apps are suitable to make money through advertising – Open questions for the right business model: – Charging for apps might to seem better at first – Trying to make the app more sticky, and hence increase usage – Benefiting from network effects in order to attract more users – Targeting the right users in order to command higher CPMs Source: Pinch Media (Feb 09), based on 30m+ downloads p. 13
  • 14. Agenda 1. Recent Developments and Trends 2. Market for Mobile Applications 3. Recent Investment Activity in the Mobile Space 4. Blueprint of an attractive Investment in Mobile Applications 5. About b-to-v p. 14
  • 15. Analysis of venture investments in mobile space (1/2) – Tracking worldwide mobile-related VC investments from June 07 to Feb 09 – In total 360 deals, thereof 159 in Mobile Apps and 31 in Mobile Advertising – Average investment per deal in Mobile Apps USD 8.5m, in Mobile Advertising USD 10m respectively – With regard to newly established funds of manufacturers an increased deal activity can be seen with significant average investments per deal, e.g. – iFund (in cooperation with KPCB): USD 6.85m (6 deals done to date) – Blackberry Partners Fund: USD 5.7m (3 deals done to date in mobile apps) – Android Developer Challenge: USD 187.5k (20 projects funded to date) Source: Own analysis p. 15
  • 16. Analysis of venture investments in mobile space (2/2) – More mobile apps in entertainment* and with social neworking features attracted funding than apps in other categories; productivity apps being the third most important category – Location-based features complement more and more funded mobile apps Entertainment Social Networking Productivity Location-based Gaming eCommerce Video Music Communication Photography Security Travel Search Money Sports * Entertainment category also comprises lifestlye apps, such as dating. Source: Own analysis (double entries possible for categories) p. 16
  • 17. Selected mobile apps in Entertainment and Gaming – Gaming apps with music and social features focussed on iPhone – Most popular game for iPhone and iPod touch in 2008 (total unique installs per month: 5m+, 100k paying customers as of Dec 08) – Business Model: Freemium model (free apps with advertising and paid apps) plus affiliate revenues www.tapulous.com USA, Palo Alto (CA) – Financials / Funding: Break-Even in Dec 08 / funded with USD 1.8m from angel investors (Andy Bechtolsheim, Marc Benioff, Jeff Clavier, Katrina Garnett, Khosla Ventures, among others) – Take-away: Addictive products create strong community for viral effects – Developer of premium 3D mobile games since 2004, business relationships to 160 mobile operators worldwide – For iPhone and iPod touch significant number of downloaded games with high conversion rate to premium www.fishlabs.de – Business Models: Channel sales via operatators and portals & direct sales such as through DE, Hamburg download platforms (for App Store: freemium model) – Financials / Funding: funded by Neuhaus Partners and angel investors – Take-away: Direct sales activities on platforms have higher gross margin with greater upside than through channel partners, they only recently peaked thanks to transaction model of the App Store p. 17
  • 18. Selected mobile apps in Social Networking – Worldwide leading social network – 180m active registered users, 220m unique users as of Dec 08 (thereof 20m via mobile platforms); Facebook for iPhone/Blackberry has 5.4m/3.7m active users per month www.facebook.com – Working on own mobile development kit for Facebook apps, recently introduced Facebook USA, Palo Alto (CA) Connect for iPhone allowing third-party apps to integrate with Facebook‘s social network – Business Model: Advertising – Financials / Funding: USD 300m revenue (2008e) / funded with USD 516m by Greylock, Accel Partners, Microsoft, among others – Take-away: Social networking on mobile will be dominated by Facebook (followed by MySpace), thus all major mobile operators are in cooperation discussions with Facebook – Mobile entertainment network with social networking features and multiplayer games (only as Java app), operating since 2007 www.qeep.net DE, Cologne – 1m registered users with high activity level (as of Feb 09) – Business Models: Advertising and premium features (item-selling, skill-gaming) – Financials / Funding: Advertising revenues since Dec 08/ funded by Bertelsmann (BDMI) – Take-away: Most users are in emerging markets, such as South Africa, Indonesia or India, and as such offer only lower CPMs in advertising; hard to monetize through advertising solely p. 18
  • 19. Agenda 1. Recent Developments and Trends 2. Market for Mobile Applications 3. Recent Investment Activity in the Mobile Space 4. Blueprint of an attractive Investment in Mobile Applications 5. About b-to-v p. 19
  • 20. Considerations for investments in mobile apps – Focus on social apps with an entertainment character (e.g. multiplayer games) – Productivity apps are mostly an extension of existing web services, otherwise an online interface is mandatory – Usage of phone's features (location targeting, accelerometer, camera etc.), especially for games – Need to create viral features and a high stickiness in order to foster distribution and extend usage p. 20
  • 21. Discussions of mobile apps development in general – Are mobile apps just extensions of existing web services? – Which applications cannot be substituted by online ones accessible through the mobile web browser? (just games?) – How scaleable are applications? Just one-trick ponies from garage developers – What is the upside potential of mobile apps? Compare recent sales of mobile apps, e.g. MindMaker to MindMeister – It is still difficult to find sustainable business models that scale. What are alternatives to mobile advertising? (subscription vs. transaction-based) – What will be the future strategy of Mobile Network Operators (MNOs)? M&A of traffic-rich apps? Specialization and portfolio of apps in this category needed for differentiation, critical mass and upside (e.g. in Gaming, Productivity or eCommerce) p. 21
  • 22. Agenda 1. Recent Developments and Trends 2. Market for Mobile Applications 3. Recent Investment Activity in the Mobile Space 4. Blueprint of an attractive Investment in Mobile Applications 5. About b-to-v p. 22
  • 23. b-to-v at a glance – At the heart of what we do is the b-to-v Investorenkreis, an exclusive circle of entrepreneurial investors from Europe – b-to-v renders exclusive services to members of the b-to-v Investorenkreis, e.g. it enables the confidential sharing of investment opportunities, supports the processing and structuring of deals, and helps to manage and control investments – Admission to the b-to-v Investorenkreis is granted only to candidates who have proven their business acumen, investment expertise, and personal integrity – Our approach gives entrepreneurs the unique opportunity to discuss their ventures and financing needs with senior entrepreneurs, benefit from their experience, their networks, and receive funding from them p. 23
  • 24. Cornerstones of the b-to-v Investorenkreis – The b-to-v Investorenkreis has 54 members – Members come from various industry backgrounds (e.g. high tech, internet, telecom, clean tech), and have – founded > 100 companies – and have invested in > 1’000 deals – sold > 300 – realized > 100 IPOs – In sum, the members’ annual direct equity investments volume amounts to EUR 20-25m p. 24
  • 25. Co-Authors Florian Schweitzer (Partner) co-founded Alexander Stoeckel (Investment Manger) b-to-v and built its network of private holds an MBA from the University of investors since 2000. He studied Business Oxford. Prior to b-to-v, he worked as Administration at the University of fund-of-fund manager and as executive St.Gallen. management assistant. Sven Eppert (Investment Manager) studied Business Administration at the Catholic University Eichstätt-Ingolstadt and the Warsaw School of Economics. Prior to b-to-v, he worked in asset management and in consulting. p. 25
  • 26. b-to-v overview BrainsToVentures AG Blumenaustr. 36 / P.O. Box 142 Dr. Jan Bomholt, Partner and co-founder CH-9004 St. Gallen Dr. Christian Schütz, Partner Contact T: +41 71 242 2000 Florian Schweitzer, Partner and co-founder F: +41 71 242 2001 www.b-to-v.com Christoph Schweizer, Partner info@b-to-v.com Dedicated people 54 members of the Investorenkreis Core personnel 8 investment professionals Deal flow p.a. (average) 1,500 business plans Deals done p.a. (average) 20 Investment strategy Opportunity driven Geographical preferences Europe, USA and Asia Financing stages Early stage, expansion stage, and later stage, as well as MBI and MBO projects Most recent Exits Three IPOs (XING, Codfarmers, Fidor) and three trade sales (Cycleon, myBet, Plazes) p. 26