Mo’ Money Mo’ Mobile

Each year a certain group of people tend to have a dogmatic chant, “this is the year for mobile”. While many may argue that 2009 was still not the year for mobile, and once again the horizon for the big boom will be 2010, I believe this indeed was a good year for mobile.

For VCs, especially growth venture capital, this was only the year for mobile for a few such as Sequoia, DFJ, Accel, and Norwest who invested in Admob, which Google acquired for $750 million. Beyond that, the applications within the current environment are not going to become $100M companies, which is the minimal revenue threshold that a company could become for a growth capital investment to make sense or for venture capitalists to even consider investing in. That being said, Admob was a beacon of hope for the rest of the community that validated the opportunity to grow a large mobile company today.  And, for everyone else (not investors) there has been a lot of activity over the last year that points at strong vitals.

The Admob acquisition seemed to have sent a small shock wave through the VC community with a number of investments following the announcement of the acquisition even though most were probably in the works prior to the investment. Regardless, these are additional positive data points, that mobile is gaining momentum.  Going forward, there will be some good gems out there that will become large companies with VC investment. However, most likely the models won’t be in the form of just an app on the app store though—nor do those app developers require the capital.

There are still a lot of opportunities within the mobile ecosystem to hit it big. While iPhone and even Adroid are the areas of focus for developers, there is still a large market out there for the rest of the highly fragmented handset market. So, solving the pain point of mobile development across platforms could be an interesting play –as daunting as it is. Being the platform or offering development tools is one area that investors would put their money such as with Unity 3D mobile gaming platform or SCVNGR geo-gaming platform. Mobile payments and location based services are other directions that have large opportunities some with large players already in the market like Skyhook Wireless . Another approach is related to the mobile web, which is still too early, but there are a lot of opportunities once the infrastructure stabilizes connectivity and makes this a more viable delivery channel.

The market still is nascent for the paradigm shift to be set as a new model, but change is happening and for the next few years, each year will be a fruitful, new year for mobile.