In most New England technology sectors, mid-2008 marked the start of a steep downward tumble in venture, IPO, and M&A activity. But not so for mobile technology. According to a report released today by Mobile Monday Boston, the local mobile industry boomed in 2008, with the total amount of money raised shooting past the $500 million mark for the first time.
The dramatic increase in activity put an end to four flat years in which New England mobile fundraising varied between $320 and $390 million per year. The exact 2008 total reported by the 101 participants in the Mobile Monday Boston study was $566 million, a 45 percent increase over the 2007 number. See the chart below; the figures, which include money raised through venture investments, IPOs, and acquisitions, are also detailed on the Mobile Monday Boston website.
It’s the first time the group—the local chapter of Mobile Monday, a worldwide organization for mobile-industry professionals—has aggregated such figures. “We wanted to quantitatively demonstrate the strong growth of mobile and wireless in Boston over the last few years,” says Kate Imbach, a Mobile Monday Boston co-founder and organizer who is also director of marketing at Boston’s Skyhook Wireless. “We’ve watched the total number of companies here grow and seen strong investments in mobile, but couldn’t draw solid conclusions about how the space has changed and where it’s going before we put these numbers together.”
The number of mobile companies based in and around Boston has exploded in recent years. MoMoBoston’s survey showed that only 10 local mobile companies raised money in 2002. In 2008, 45 companies received investments.
Altogether, Mobile Monday Boston counts 180 companies in the mobile space in New England. (Our “Greater Boston Mobile Technology Cluster” list, published three weeks ago, was based largely on a member list shared by the organization.) Mobile application and software builders form the largest group within the local mobile industry (39 companies), followed by marketing (14 companies), advertising (15), voice recognition (14), content (13), hardware (11), and infrastructure (11).
MoMoBoston didn’t detect any dropoff in mobile investment as 2008 progressed: the total of $562 million was invested in fairly even chunks across the four quarters, with a slight spike in the second quarter.
“The report is very encouraging,” Imbach says. “With over half of a billion dollars invested in 2008 and 180 very diverse companies operating locally, Boston has quietly developed into the worldwide hub of mobile and wireless.”
Adding up the funds invested in each company over time, MoMoBoston found that Boston-area mobile companies have raised some $4.63 billion altogether. And that fundraising success is likely to continue, at least for a while, says Chris Hazelton, wireless and mobile research director at The 451 Group, a market research firm with offices in Boston, New York, San Francisco, and Washington.
“While not immune to the economic downturn, mobile software and services will continue to be a key area for investment over the next 18 months, due to long product development cycles and only a slightly muted growth rate in sales of smartphones,” Hazelton said in Mobile Monday Boston’s announcement today. “Investors are still excited about the mobile space, and with a significant academic and technology base, Boston is the place to watch for acquisitions and investments in mobile.”
