There has been some discussion lately around the dynamics that led to the unexpected success of Flappy Bird, a remarkably simple iPhone game app that at one point was reported as pulling in as much as $50K a day in revenue. At least one analysis suggested that in-app review mechanics propelled the game to the top of the charts. In the article, the author makes an interesting observation, that “writing hilariously detailed iTunes reviews of the game became a viral phenomenon.” Since we track over 1M apps in the iTunes App Store and also collect a sample of reviews for these apps, we decided to check if there is a clear relationship between how detailed an app’s reviews are and its rank. We used the number of words in the review as a measure of “detail”, which while not perfect, is a pretty good proxy.
Here’s the graph of the application rank in the Overall genre and the median number of words in a sample of the app’s reviews -
Continue reading “Do Detailed App Reviews Help App Store Rank?” »
Venture capital returns are often said to follow a power law. Simplistically, the best investment returns more money than the rest of the investments combined. We analyzed the largest 100 U.S.-based tech M&A or IPO exits since 2009 to see whether the power law actually holds and who the most frequent investors in those companies are.
The data below.
Continue reading “The Venture Capital Power Law – Analyzing the Largest 100 U.S. VC-Backed Tech Exits” »
The cloud storage space is one that IPO watchers are keenly watching in 2014 driven primarily by two high flyers in the space – Dropbox and Box.
Backed by investors including US Venture Partners, Scale Venture Partners and Draper Fisher Jurvetson, Box filed for an initial public offering which could take place as early as next quarter. Not to be outdone, Box competitor Dropbox raised $325M in new funding at a $10B valuation – a $6B increase from its 2011 Series B round.
Collectively, the two cloud storage vendors have raised over $990M in aggregate funding to-date. And both while still private have been willing to acquire – or invest – in multiple startups. Sequoia Capital-backed Dropbox has acquired or acqui-hired nine companies since the start of 2012 including a host of mobile apps, most notable of which was Charles River Ventures-backed Mailbox, acquired for a rumored $100M. Meanwhile, Box has made four acquisitions – as well as two separate minority investments in a diverse range of companies.
Using CB Insights exit and financing data, below is a compilation of Box and Dropbox’s M&A & investment activity.
Continue reading “Dropbox vs. Box – Comparing the M&A and Investment Activity of the Cloud Storage Giants” »
With plans to raise as much as $500M in its forthcoming IPO, Candy Crush maker King stands to be among the largest gaming exits in recent history – and should net a windfall for VC backer Index Ventures.
So given the anticipated IPO, we used the interactive “Rankings” feature on CB Insights to help identify the top 10 largest venture-backed M&A or IPO exits in digital gaming over the past five years. Together, the 10 venture-backed companies exited for over $15B in aggregate value at the time of exit. Six of the exits went to internationally-based companies, in line with the shift of mobile gaming VC deals to developers based outside the U.S.
Continue reading “Ahead of King’s IPO, Here Are the Top 10 VC-Backed Gaming Exits Since 2009” »
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Highly publicized hacking incidents and data breaches on the likes of Target, JP Morgan, Snapchat and Skype have made security a top priority and concern for corporations, governments and even consumers. The fear that these attacks has created also has spurred an opportunity for emerging companies to fill those gaps resulting in increased corporate, venture capital and private equity investment and exit activity in the sector.
Of course, with increases in investment and acquisitions, the market for cybersecurity firms has become increasingly crowded and competitive. And so all this increased activity also has served to create a great deal of noise.
491 Private Cybersecurity Companies
Our financing, exit, competition and chatter/sentiment data on the industry all unequivocally point to cybersecurity as a secular trend. But with all things that become “hot”, separating the wheat from the chaff becomes particularly difficult especially as new trends, buzzwords, companies and sub-trends emerge (and disappear). Cybersecurity also has geopolitical factors adding to the complexity, as some foreign buyers appear reticent to buy services from US vendors for fear that their data would be more secure outside of the U.S. driven by the revelations of Edward Snowden.
There are a staggering number (491 and growing by our count) of private cybersecurity tech companies attacking this market, but as is always the case, private companies are terribly difficult to understand. The opacity of private companies makes it difficult to:
- Identify relevant companies - New companies are emerging weekly given investment flows into the space. How do you track them?
- Assess company health/momentum – How do you scalably, objectively and reliably analyze nearly 500 private cybersecurity companies efficiently?
With this in mind, we are issuing Mosaic Ratings on 491 private cybersecurity companies.
Continue reading “Cybersecurity – Initiating Coverage on 491 Private Companies” »
Last June, we took a high-level look at the total funding to venture-backed companies emerging across the wearable tech landscape from health & fitness monitors including Jawbone and Fitbit to wearable baby monitors like Sproutling and Rest Devices. And already, there have been some big updates in the wearable ecosystem. Jawbone, a Tech IPO pipeline company, is rumored to be raising financing at a valuation over $3 billion, while Intel recently acquired smartwatch maker Basis Science for $100M, its latest acquisition of an Intel Capital-backed company.
Using CB Insights data, we dove deeper into financing trends by stage and geography in wearable tech over the past two years. In 2013, investors put $458M into wearable companies across 49 deals. On a year-over-year basis, deal activity to wearable tech startups rose 158% while funding grew nearly 80%. Stripping out Foxconn’s $200M corporate minority round to GoPro in Q4’12, we see that YoY funding dollars actually grew by over 8x.
Continue reading “Wearable Tech Investing Snapshot: $458M Raised in Funding Across 49 Deals in 2013” »
Kozmo.com was among the biggest, costliest venture-backed startup failures of all time. It was a beloved service but unfortunately selling a $4 pint of Ben & Jerry’s for $3 is not a business model you can “make up in volume”. But it’s 2014 and welcome to Kozmo II: The Sequel. This time, a host of new smartphone apps have cropped up hoping to once again capitalize on the promise of same-day delivery.
In the running to win share of the same-day delivery market are companies both public and private. Among the venture-backed startups offering same-day delivery apps of goods including food and grocery are Instacart, TaskRabbit (through its DeliveryNow service) and Postmates. eBay, Amazon and Google have also launched apps and there is the possibility that Uber may one day turn to the same-day delivery space as well. In fact, eBay has actually acquired Shutl and Google has acquired BufferBox to further their delivery ambitions.
So as the space becomes crowded, we wanted to take a look at how the same-day delivery apps were trending in their App Store categories. Some observations below.
Continue reading “Kozmo II – The Sequel: A Look at App Store Data for Same-Day Delivery Services” »
VC firms don’t actually make investment decisions, sit on boards, or build relationships with entrepreneurs – their people do. We asked the question: Who are some of the best VCs out there?
Using CB Insights data and some network analysis techniques & algorithms (see interactive social graph here), we’re able to provide some perspective into who the best VCs are:
So first, some highlights:
- Ted Schlein of Kleiner Perkins and Ping Li of Accel Partners sit on the most Tech IPO Pipeline company boards – 7 each.
- Ben Horowitz of Andreessen Horowitz ranks highest on measures of Betweenness and Reach
- Peter Fenton of Benchmark ranks highest on Influence
- Brian Schreier of Sequoia Capital is the happiest VC
What does this all mean?
With Investor Mosaic, CB Insights is using predictive models & analytics to assess VC firm quality. But the question that often comes next from LPs relates to individual partners at each firm. Specifically, they wonder about the following:
- When they see turnover at a firm at the partner level, how should they read this? In short, turnover is not always a bad thing, but how can LPs understand when it is and when it is not?
- Related to the question above, LPs want to understand which individual members of the investment team are the strongest and who are not. As one LP indelicately put it, “Can you tell me who the dead wood is at a VC firm?”
Continue reading “Who’s Who Among VC Partners: An Algorithmic Take on Portfolio Strength, Network Centrality and Happiness” »
Within VC circles, WhatsApp’s $19B acquisition stands out not just due to its sheer size but also because it included just a single outside institutional investor, Sequoia Capital.
To analyze just how rare Sequoia’s feat was among notable U.S.-based VC-backed tech exits, we dug into CB Insights data and looked at the number of VC investors in the 100 largest venture-backed tech exits since 2009 to date. The data below.
Continue reading “Lean In: Sequoia Capital Was the Only VC Firm in WhatsApp. How Often Do VCs Have the Conviction To Go It Alone?” »
While Carl Icahn continues to push for PayPal’s spin-off into a separate company, eBay CEO John Donahoe has resisted the idea, explaining in January that the company would step up its M&A and investment activity in 2014, “particularly in PayPal.”
In fact, eBay has been unafraid to make big bets through M&A on both sides of the house – the core eBay commerce business as well as for PayPal which has become a payments juggernaut. Recently, eBay acquired Accel-backed payments gateway Braintree for $800 million.
We analyzed CB Insights exit data to get a better understanding of the geographic, industry and funding characteristics of eBay’s M&A, as well as whether there are any VCs that eBay tends to favor when it comes to its acquisition activity. The data below.
Continue reading “eBay M&A History and Trends” »