Venture Capitalists: It’s Mobile’s Time

Carl Weinschenk

It is widely known that much of the excitement in technology in general and telecommunications in particular is in the mobile sector. That established fact is further validated by a Rutberg & Co. report on where the bulk of venture capital (VC) investment — the smart money — is going.

The report, which is described at TechCrunch, describes a very hot sector. The category as a whole generated $3.9 billion during the first half of 2012, which is the most ever recorded for the sector by Rutberg, which began tracking mobile investments in 2001. Of that total, $1.009 billion was aimed at consumer apps.

A link to the entire slide deck is provided at the end of the TechCrunch story. The takeaway is that as far as VCs are concerned, it’s mobile’s time:

Just as consumer app interest has grown very steadily, it looks like interest in other areas has been significantly more choppy. Some areas, like telecom infrastructure and semiconductors — once taking a significant proportion of mobile VC funding — appear to have fallen off the radar by quite a lot. That could also have to do with the maturity of the sector: a lot of the building work has been done (for now), and now it’s time to milk those networks for all the revenue they can give.

VC and other investments are cyclical, so this landscape is guaranteed to shift. As of right now, however, it is very interesting to survey and sample the type of projects that are winning with VCs.

Earlier this month, for instance, the VC arm of Motorola Solutions — which did not move to Google — invested between $1 million and $5 million in Fixmo, a Toronto-based mobile device management (MDM) company. The Globe and Mail story suggests that Fixmo is doing what a lot of other startups and established companies are: Dealing creatively with the bring-your-own-device (BYOD) trend. A bit more specifically, Fixmo is seeking to secure non-BlackBerry mobile devices that are not necessarily preauthorized by IT departments.

Another recent example of VC money flowing into mobile is Starbucks’ investment of $25 million into startup Square. Square, according to the Wall Street Journal, can turn smartphones into mobile payment devices. Starbucks also is using the technology and, according to the story, eventually will use it in 7,000 stores in the United States.

The story says that the Starbucks investment is part of a bigger financing round, but that Square released no details on other elements of the transaction. CNN lists some previous investors in the company. Some, or all, of those names undoubtedly are in the current round.

It’s interesting — but not particularly surprising — that the two highest-profile recent examples of VC money in the mobile field touch on two of the hot button topics: MDM/BYOD and mobile payments. That’s really good news, since the millions and billions that find their way into specific categories will eventually do what they are intended to do: Create new and more potent tools for enterprises and consumers.

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