Blog Post

Mobile Content Startups: Easy Money

Venture firms and investors seem to be pouring more and more money into startups that create or enable mobile content. In September over $150 million in venture funding was invested in companies in the mobile content industry. October and November will likely have high numbers too, given the large amount mobile content company fundings already released this week.

Yesterday mobile search and content company go2 said it has raised $13 million, mobile entertainment company Thumbplay said it has raised $15 million, mobile content company Wmode said it raised $6 million, and mobile video-ad company Rhythm NewMedia said it’s raised $18 million (which we mentioned yesterday.)

That was just one day. Last week mobile radio company Spodradio said it raised $10 million, and mobile content company mVisible said it raised $3 million. Every week there seem to be a dozen more companies, and almost every mobile content startup we’ve talked with this year has said that VCs are banging down their doors looking to invest — there’s no small amount of me-too or just plain bad ideas getting VC dollars.

It’s come to the point where mobile executives are really fond of comparing the recent funding environment for mobile startups to “the early years” of the Internet. Though, of course the mobile environment has the carrier controlling the deck, so there’s a big difference.

While “mobile content” is a pretty large bucket with which to classify a lot of these companies, the trend isn’t too hard to miss: phone companies are struggling to grow data revenues while the margins on voice are disappearing, cell phones are becoming computing devices, and the growth of wireless broadband is providing the connection. Now all they need is the stuff to sell over the pipes.

6 Responses to “Mobile Content Startups: Easy Money”

  1. I would like to know why people are so stupid to pay for those “extras” on their phone. I admit i tried it with a weather application on Verizon. But then i saw how long it took to go through each step waiting for it to download and bring up maps etc meanwhile burning up my minutes that Verizon is so stingy on not providing so i said to myself isnt it easier to tune to local radio station for free. I canceled. The other stupid thing people do is pay for those ringtones and whatnot but read the terms and you see on Verizon that you lose the ringtones if you cancel the montly charge for the application. Kind of like buying online music. Some sites you lose your songs if you dont maintain monthly account. But millions of idiots keep paying for it and supporting it. Lazy lazy people. Buy the damn cd rip it on the pc and burn it to cdr like the old days.

  2. Most of ThumbPlay’s 2006 success is due to the so called “free ringtones” promotion.

    Many mobile content companies including thumbplay & the italian company Dada have made millions in it. This shows how much you can bank on customers igorance :)

    Some say that Dada have become the #1 advertiser on google for 2006 surpassing eBay.
    But the “free ringtone” novelity is wearing down and i dont think they can see 2006 level success in the future.