VC Investments and Android

Today’s emerging VC investment trends are seeking out mobile app start-ups. The demand for developer tools is also increasing. VCs and enterprise technology organizations such as Facebook are actively capitalizing in this market. Industry sectors such as cloud, education and health care have appealing business models for VCs.  The mobile market and business model requirements for Android developers seeking investments is also relevant for today.

CB Insights

Investment priorities for Android mobile app development are in demand. According to Developer Economics, almost 35 percentbut thats of developers use the Android platform. Developers and organizations who leverage tools are cost saving. Even one application for the entire company would be cost efficient and easy to use and maintain. Cost is priority and there should be cost savings opportunities which tie into mobile apps. This is learned by consolidation what true benefits are to be drove out from applications. From the business standpoint, information and apps need to avoid the "overwhelmness factor" of having too much by executing proper consolidation.

Developer Economics

Mobile apps start-ups are lucrative for funding. The majority of these apps are gaming but this category is also highly competitive. Non-gaming apps such as camera features, mobile sensors, alternate tools, social functionalities that network the device or integrate to improve the mobile device camera are also doing well. Social messaging platforms such as SnapChat lead these categories which combine network and messaging together.

Although the IPO market itself was somewhat weak last year, it is expected to pick up by 2014. Both the M&A and IPO markets in gaming delivered greater than 6x ROI between 2005 and 2012. The $1 billion-plus decline in social game investment made up 94 percent of the decline from 2011, as VCs abandoned social gaming investments, with the exception of social gambling. The mobile app economy is expected to double by the year 2017.

Bloomberg

Online and mobile games continue to deliver strong growth and returns, with forecasts estimating that this sector could the entire games market to $83 billion and take more than 55 percent revenue share by 2016. Both the M&A and IPO markets in gaming delivered greater than 6x ROI between 2005 and 2012, the report finds, and although the IPO market itself was somewhat weak last year, it is expected to pick up in 2014.

Facebook had over 35 percent VC revenues derived from last year. Google is a VC company with an estimate $340 billion market capitalization. Google is now also one of the world’s largest hardware makers, Google owns six data centers, with three in Europe and four more under construction (three in Asia and one in South America). Google’s background consists of human capital and enough business funding for investments.

The risks in VC investment are still substantial. The failure rate is still incredibly high. Up to 40 percent of U.S. start-ups do fail in terms of ROI. According to the U.S. Bureau of Labor Statistics, about 60 percent of start-ups survive to age three and roughly 35 percent survive to age 10.  Of the 6,613 U.S.-based companies initially funded by venture capital between 2006 and 2011, 84 percent now are closely held and operating independently, 11 percent were acquired or made initial public offerings of stock and 4 percent went out of business, according to Dow Jones VentureSource.

Mobile app development is rapidly growing. The VC areas are diversifying due to the cloud revolution and enterprises adopting to the cloud models. There are several disruptive technologies that have emerged over the past few years–gamification, 3D video, IPTV, multi-user gaming, and augmented reality. 2013 has challenges for gamification and potential disruptions. Consumers will continue to lead  in the adoption of these innovations.