News & Analysis

The average value of a mobile unicorn company is now $9.3 billion

- August 10, 2015 2 MIN READ

The average valuation of a mobile unicorn company is now $9.3 billion, according to a report released last week by Digi-Capital.

With forecasted revenue to be north of $850 billion in the mobile space within the next three years, it is hardly surprising that the number of unicorns playing specifically in mobile is growing. According to the Digi-Capital report, there are now 89 mobile unicorns across 18 sectors within 15 countries.

The report has received some critique, however, from journalists in Asia like TechinAsia’s Steven Millward for its notable absence of companies like Xiaomi. To be fair, a footnote on the report does state that it excludes three types of companies: where a majority of the business is device-based; where mobile infrastructure is excluded (having a mobile site doesn’t count); and where the mobile aspect of the business is a minority earner for the company.

This Q2 report by Digi-Capital demonstrates the rapid-growth of mobile unicorns when it comes to valuations, with the 89 companies adding a collective $44 billion to their value in just the last three months. This is a total shareholder value of $831 billion. Companies like Uber and other transport applications in places like China have quite obviously helped to drive up the valuation average. but even so, a ‘mid-range unicorn company is now worth around $3 billion.

Long gone are the days where a $1 billion valuation was considered some sort of magical milestone in comparison. The biggest winners in the last quarter according to the data from the report were companies like Uber, Facebook, FitBit and 58.com from China. The biggest losers were US-based companies Twitter and LinkedIn; shedding a combined $15.7 billion off their valuations.

Digi-Capital ReportWhat is quite obvious from the report is that US-based mobile startups clearly dominate the list, closely followed by China, but there is a distinct lack of any mobile unicorns from Australia and New Zealand (ANZ). Even though there are companies like Atlassian, Seek and RealEstate in Australia that are unicorns and companies in New Zealand like TradeMe and Xero that are well on their way there, the distinct lack of globally focused mobile innovation coming out of our countries is a little bit worrying.

The addressable markets within ANZ might be smaller than the US and China, but we sit right on the door step of the region that has the most mobile penetration in the world. This represents a unique opportunity for our mobile startup space. There are already a couple of companies like Invoice2go and TinyBeans that are making some pretty decent headway in mobile across the region, but we have a long way to go.

Then again, to play devil’s advocate, many of these unicorns are not yet profitable companies. There are some in the ecosystem that would argue it is much better to have a profitable and sustainable business than the title of a unicorn company.