June is Innovation Month in New England – A Look at The Mobile Sector

I was reading Scott Kirsner’s recent article Innovation Month: What’s It To You and when I read his request for bloggers to “write a post about some initiative, dynamic or group that you feel is vital to innovation in the region” it reminded me of a presentation I gave a few weeks back to the 128 Innovation Capital Group specifically on a sector in our region that is driving innovation and real value. The title of my presentation was “Mobile Innovation in Boston / New England, Entrepreneurial Opportunities for the Future.”

At Point Judith Capital we have had the opportunity to fund some truly pioneering entrepreneurs and innovative companies in New England in the mobile sector. We were founding investors in Optasite, a mobile tower company, which was headquartered in Westborough, MA and was led by Jim Eisenstein who previously had co-founded American Tower (NYSE: AMT), a $17 B market cap company that was started and is still headquartered in Boston. We also backed Vaultus Mobile Technologies which recently merged with Antenna Software and is now the largest, private mobile software company in the US providing mobile platforms for E-Trade, Schwab, Bank of America, Merrill Lynch and many other large brokerage firms.

If you looked no further than the number of events and the attendance levels at mobile focused gatherings sponsored by groups such as Mobile Monday, Xconomy, MIT, MassHighTech, Microsoft, Google, etc. you would conclude New England is a hotbed of innovation in this sector.

I have intuitively felt that mobile was important to Boston and New England but in order to prepare for my presentation I did some research and I was surprised to find just how meaningful this sector really has become in the last few years.

The following data clearly highlights New England as a Center of Mobile Innovation and Value Creation.

– There are at least four multi-billion dollar market cap companies in the region that are solely or substantially focused on mobile (American Tower, Hittite Microwave, Nuance, Skyworks).

– In 2008 and 2009 New England had the largest or the second largest venture backed exits in mobile (Optasite in 2008; 2nd largest VC Exit in mobile, Starent in 2009; largest VC Exit in mobile).

– One of the leading mobile OS’s was developed by a startup in Boston (Android, started by serial entrepreneur Rich Miner and then sold to Google).

– According to Mobile Monday Boston, nearly $2 billion of VC has been invested in Mobile companies in the last 5 years in the region.

– Some of the leading companies in the mobile advertising space are headquartered in New England or have been sold to larger players that now have their mobile advertising headquarters in the area (most recently Quattro Wireless which was acquired by Apple and now has their ad HQ here).

– In 2008 and 2009, $9.4 billion of equity value was created in New England by mobile companies (includes public and private equity value growth), that is pretty compelling when you consider how much value erosion occurred in the economy more broadly.

These are both very compelling and sizable statistics. I don’t know how many mobile startups there are in New England but I continue to see new companies with really compelling ideas like Scvngr and many others that give me a sense that innovation is accelerating in this sector in New England.

This is good news for the New England entrepreneurial ecosystem because it shows that we have another strong, high growth cluster that is driving innovation and giving rise to multiple spin out companies that will expand the sector and its strength in our market (and continue to provide the opportunity for more great investments).

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