From Snapchat and Uber to Flipboard and Tango, a number of venture-backed mobile companies are chalking up huge financing rounds and valuations in the private markets. And sentiment on mobile as the next frontier continues to be hot. Over the past three quarters alone, U.S.-based venture capital investments to mobile & telecom companies have hit $3.13B across 425 deals.
In Q1 2014, VCs poured $931M into 125 mobile deals. It was a pullback from the prior two quarters where funding eclipsed $1 billion, but compared to the same quarter last year, funding to the sector was up 30% while deal levels increased 18%.
Digital health tops mobile sector deal activity; mobile communication dominates funding
A large cross-section of mobile industries received venture capital funding in Q1. Leading deal activity were mobile applications and platforms with a focus on health & wellness and the healthcare industries which combined to take 13% of all deals in Q1. Interestingly, seeded mobile digital health startups have had the hardest time raising follow-on investment. CRM and conferencing & communication each saw 7% of mobile deal share in the three-month period.
Mobile messaging app Tango’s huge $280M Series D round buoyed financing to the conferencing & communication sub-industry, which also saw a handful of mid-stage deals to enterprise communication startups including CoTap and TigerText.
Mobile seed VC deals hit a high in Q1
Q1 saw 44% of all mobile VC deals come at the seed-stage, marking a five-quarter high. Conversely, Series A deal share in the mobile space dropped to a five-quarter low falling from 39% in Q4 to 26% in Q1. Mid and late-stage deal activity in the mobile sector remained range-bound in Q1.
Funding-wise, Series D took 33% of all mobile VC funding activity – increasing from just 5% in Q4’13. Series C funding share continued to fall after Q3’13’s high of 39%.
Massachusetts mobile deal share rises to five-quarter high
Mobile VC deal share continued to remain concentrated among just a small subset of states. After a drop in Q4’13, California’s mobile VC deal share rebounded to take 55% of all deals in the sector. Interestingly, Massachusetts VC deal share to the mobile sector rose from 5% in Q4’13 to 9% in Q1’14, a five-quarter high.
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