Q2 2014 was one for the record books, as Uber and Lyft led a $2.59B quarter for VC-backed Mobile & Telecom startups.

After two straight quarters of funding decline, US Mobile & Telecom VC funding caught fire leading to its biggest quarter ever coming in at $2.59B in funding across 146 deals in Q2’14, a 178% funding increase and 17% deal increase from the previous quarter.

Uber and Lyft were the main drivers of the funding as the companies continue to fight a multi-city battle with each-other and governments. The dynamic duo raised a combined $1.45B in the quarter or over half of all Q2’14 Mobile funding. Such large rounds, of course, caused a lot of chatter about the transportation tech / ride-sharing space by VCs eager to share their opinions.Mobile VC Funding

Uber & Lyft Buoy Travel Funding Share

Travel dominated Q2’14 mobile funding due to the aforementioned $1.45B raised by Uber and Lyft, which accounted for 57% of the quarter’s funding. Collaboration and Project Management was second in funding share partially due to Slack’s $43M Series C which featured investors Accel Partners and Andreessen Horowitz among others. Slack was the 7th largest mobile deal of the quarter.

Mobile vc dollar share by industry


Gaming companies as well as Customer Relationship Management startups garnered the greatest number of deals in Mobile for the quarter. Orbotix, the mixed-reality gaming company was a recipient of a $15.5M Series E round backed by Foundry Group, Shea Ventures, and Grishin Robotics, while mobile game developer Super Evil Megacorp closed the second largest gaming round of the quarter; an $11.6M Series B round backed by General Catalyst and Raine Ventures.

CRM landed in the top 3 for mobile deal share for the second straight quarter in Q2’14. Mobile-first sales productivity platform Clari was the big winner, with two successful rounds of funding totaling $26M from investors including Sequoia Capital, Bain Capital Ventures, and Northgate Capital. Ibotta, the company aimed at gamifying brand loyalty and coupons, was the other recipient of a $20M+ in capital in the form of a Series B investment by Jim Clark, Great Oaks VC, and Tom Jermoluk.

Mobile VC deal volume by industry

Seed Deal Share Holds Strong

On a funding basis, Uber and Lyft caused Series D financing to dominate with 54% of all mobile VC funding activity, up from 33% in Q1’14.

On a deals basis, Seed financing deal share remained above 40% for the second straight quarter as mobile startups continue to be en vogue especially in the Uber for X segment. Series B deal share notched a five-quarter low, while Series A deal share remained below 30% for the second straight quarter.

The expansion in the number of seed rounds coupled with a compression in the # of Series A rounds will likely mean a handful of winners and many orphans in the mobile category.  Of course, these mobile-first orphans will be in high demand and many will find homes via acqui-hire.

mobile VC by stage

California Dominates Funding and Deal Share

Mobile VC funding was dominated by California with 86% of all dollars in Q2’14 and 51% of all deals. Q2’14 was the second straight quarter in which California took over 50% of mobile VC deals.  Massachusetts jumped to a five-quarter high of 10% on a deal basis, but fell sharply to just 2% of funding share, down from 12% in Q1’14. Meanwhile, other markets took 23% of all deals, as both Florida and Colorado outpaced Washington and Texas in Mobile VC investments, partially due to Orlando-based Kony’s $50M Series E, the fourth largest Mobile deal of the quarter.

Mobile VC by stage deals

On a city basis, San Francisco captured the most deals of the quarter (29) and the most funding ($1.74B), while New York was second with $75M in funding across 16 deals. Boston tied for third with just 4 deals, showing the level of concentration that SF and NYC were able to garner this quarter..

The dominance of San Francisco over its Silicon Valley neighbors continues as more startups are opting to call SF home as recruiting for technical talent stays competitive, and companies view the vibrant city scene a selling point for employees. As demand for high-tech talent continues to increase, expect this trend to as well.

Top cities for Mobile Q214