mbaas overview
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PRIVATE AND CONFIDENTIAL TECHNOLOGY FOCUS. BROAD REACH. OPTIMAL RESULTS.
MBaaS Overview
Peter Falvey
Managing Director
P. 1.617.598.0437
Jason Myler
Managing Director
P. 1.617.598.0438
Jeffrey Cook
Vice President
P. 1.617.598.0439
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MBaaS Will be an Active Sector in 2013
MBaaS has emerged as the leading app development technology: MBaaS is a critical piece
of mobile infrastructure, demonstrating major advantages over other application development
tools
The market is separating: After two years and numerous entrants in the MBaaS market, we are
starting to see a class of leaders breakaway from the pack
A big push into enterprise in 2013: Enterprises are struggling with existing app development
tools and are seeking MBaaS. MBaaS players are beefing up their enterprise offerings and
beginning to move away from an increasingly crowded developer market
Consolidators have their eye on MBaaS: Enterprise mobility and PaaS vendors are
increasingly talking about MBaaS and see its viability. We believe this will be manifest through a
wave of interest and acquisition activity in 2013
The MBaaS market will begin to pick winners in 2013 and see an increased amount of
consolidation and investment activity
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Crowded Industry Beginning to Separate
Enterprise Focus Developer Focus
= Acquired / Operating Subsidiary
Sc
ale
S
ma
lle
r L
arg
er
Market Solution
Scale based on available revenue figures and amount of funding raised
$7.5M
Seed
Seed
Seed
$7.0M
$7.0M $7.5M
$29.0M
$50.2M
Seed
$46.6M
Seed
Seed Seed
Seed
$72.1M
4
$0.22
$7.70
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
2012 2017
Fast-Growing Market
Strong growth potential and underlying growth drivers will continue to attract
investment and transaction activity in MBaaS
MBAAS MARKET SIZE ($ BILLIONS)
• Analysts expect the MBaaS market to grow
from ~$200M in 2012 to $7.7B by 2017
• Numerous trends are fueling the growth of
MBaaS
- The technology stack and mobile
services are becoming increasingly
complex
- Developers are needing to do more with
less, bringing apps to market faster with
no marked increase in budget
- PaaS adoption and the need for mobile
infrastructure is paving the way for
MBaaS
- Need to scale quickly and reliably
KEY DRIVERS
Source: Market & Markets
104% CAGR
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Solution User Exp. Time to Market Flexibility Cost IP Ownership
Organic (In-house)
Higher:
developers can
take full
advantage of
device, design
and branding
Native apps for
users
Slower: significant
time required to
develop apps from
scratch and
integrate systems
on the back-end
Higher: each app
is customized
Flexibility around
deployment
Higher: Significant
resources are
required for
development
Cost per app is
highest
Full ownership of
front-end and
back-end IP
MEAP Lower: App
templates and
features are
determined by the
platform
Higher: Faster
development
existing templates
and back-end
May be slowed by
need to learn
coding language
Lower: vendors
lock-in
organizations to
the platform
Higher total cost of
ownership
Static cost model
is a negative
Vendor lock-in
limits IP
ownership
MBaaS Leverages
existing mobile
platform expertise
Truly native
experience for
users
Higher: app
templates and
back-end
significantly
reduce time-to-
market
No vendor lock-in
allows for data
portability
Ability to scale
reliably and
quickly
Flexible pricing
models
Lower total cost of
ownership
More ownership of
front-end and
back-end IP
MBaaS Will Win App Development Technology Race
MBaaS provides the most compelling mobile application solution to developers,
balancing higher flexibility and user experience with faster time-to-market and TCO
6
A Diverse Group of Buyers Will Want MBaaS
Larger enterprise software vendors and PaaS providers will look to consolidate the
MBaaS industry in the next 12 to 24 months
MEAP has More Limited Buyer Appeal
MBaaS has a Wide Appeal to Many Buyers
EXAMPLE POTENTIAL ACQUIRERS
MBaaS is seen as both a critical app development tool and the next iteration of PaaS, and
will hold appeal to buyers with plays in enterprise mobility or cloud infrastructure
Our conversations with large tech companies suggests that MBaaS is on their radar
screens and we expect acquisition activity to begin later 2013
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MBaaS Sits at the Intersection of Two In-Demand Markets
Both EMM and PaaS markets have been among the most active M&A markets among
large acquirers in the last few years
Target Acquirer Date Valuation* EV/Revenue*
Pending $250M 10.0x
December 2012 $355M 15.4x
October 2012 $25M 31.3
June 2012 $82M 4.1x
April 2012 $28M 28.0x
March 2012 $60M 12.0x
February 2012 $70M 23.3x
February 2012 $4M N/A
December 2010 $216M 43.3x**
November 2012 $32M N/A
July 2010 $5.4B 4.5x
April 2010 $200M 6.7x
August 2009 $362M 12.1x
Median: 12.1x
Mean: 14.7x
• Data based on Falvey Partners’ and market estimates when not publicly disclosed
** Median and Mean data excludes multiple paid for Heroku
Source: SEC Filings, Company Press Releases, Wall Street Research, 451 Research, CapitalIQ
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Falvey Partners Overview
FOCUS SELECT TRANSACTION EXPERIENCE
December 2011
Has acquired
July 2012
Has been
acquired by
September 2011
Series D
Convertible
Preferred Stock
Led by
September 2012
Has been
acquired by
A portfolio company of
July 2011
Has been acquired
by a portfolio
company of
April 2011
Has been
acquired by
July 2011
Has been
acquired by
February 2011
Growth equity
investment from
July 2011
Has been
acquired by
March 2011
Has divested
its diagnostic
solutions unit
November 2010
Has received an
investment from
A portfolio company of
October 2010
PGI Notify and Send
platforms acquired by
August 2010
Two divisions have been
acquired by a portfolio
company of
April 2010
Has been
acquired by
August 2010
Series C
Convertible
Preferred Stock
Led by
SERVICES
Sell-side or buy-side M&A
Growth capital raising
Board and corporate advisory
SECTOR
Software / SaaS
Tech-enabled business services
IT services
Internet / digital media
COMPANY TYPE
$50M - $250M in enterprise value
Growing, with established scale
Profitable or near-term path to profitability
Falvey Partners is a leading advisory firm serving
mid-market clients across technology sectors
Founded in 2012 by Peter Falvey and key members of the Morgan Keegan / Revolution Partners team
Falvey Partners professionals have closed dozens of software transactions representing billions of
dollars in transaction value