Startup Istanbul 2016 / Christopher Rogers - Partner Lumia Capital

1CONFIDENTIAL – DO NOT DISTRIBUTE


Chris Rogers, PartnerOctober 10, 2016

A Mobile, Global, Agile Growth Fund for the Next Wave of the Internet

THESE MATERIALS ARE PROVIDED FOR CONVENIENCE ONLY AND MAY NOT BE RELIED UPON. PROSPECTIVE INVESTORS MAY RELY ONLY UPON THE FUND'S PRIVATE PLACEMENT DISCLOSURE OR AN OFFICIAL SUPPLEMENT THERETO.


Traditional Data Enabled

Time spent on traditional communications (Voice, SMS)

Time spent on data-enabled communications

2010 20202015

Increasing size of charts reflects increasing time spent on mobile

Data courtesy of Delta Partners

Consumer mobile usage is changing


Increasing size of charts reflects increasing customer ARPU

Dollars spent on traditional communications (Voice, SMS)

Dollars spent on data-enabled communications

2010 20202015



Resulting in changes to consumer mobile expenditure


Increasing size of charts reflects increasing time spent on mobile

2010 20202015

Time spent on traditional communications (Voice, SMS)

Time spent on data-enabled communications



Business follows the trend in both usage…


Increasing size of charts reflects increasing customer ARPU

Dollars spent on traditional communications (Voice, SMS)

Dollars spent on data-enabled communications

2010 20202015



…and expenditure


Leading to a large and growing market opportunity

2010 2015 2020

$2.0

$2.8

$4.6

Global Connectivity and Digital Revenues

Connectivity Digital Services

51% CAGR

109% CAGR

19% CAGR



How can Telcos survive in the new mobile and digital world?


Telcos don’t innovate like big tech companies

Avg. Telco

Source: estimates, Delta Partners

% of budget spent on innovation


Investments Joint Ventures

TELCO PRIVATE INVESTMENTs VERIZON REDBOX PARTNERSHIP

But they do invest in and partner with tech companies


+

+

+

Benefits:

Shareholder value and returns

Access to expertise and resources

Telecom enablement partnership

for telcos

for startups

Examples:

Investments in digital startups


Comcast + iControl

Company

2003Redwood City

Series C(Jul 2009)

Founded

Initial Investment

A software platform for service providers and home security companies enabling them to offer connected home solutions to households worldwide

Internet of Things (Smart Home)

Description

Area of Collaboration

Initial investment by Comcast Ventures in 2009 (other investors included Intel, Cisco, CRV, and KPCB)

Became important technology partner for Comcast once their smart home solution launched in 2010

Software was the platform behind Xfinity Home, enables communication and management for home sensors as well as cameras and thermostats

Acquired by Comcast in July 2016

Details


Orange + Deezer

Company

2006Paris

Series E(Jan 2016)

Founded

Initial Investment

An online platform and app that provides songs from a variety of genres, delivering a multi-local music experience to more than 26 million people worldwide

Entertainment (Music)

Description


In 2011, announced a distribution partnership with Orange to make Deezer Mobile available exclusively to Orange pay monthly customers

In 2016, Orange invested in $110M Series E after Deezer cancelled planned IPO (other investors included Access Industries)

Investment strengthened partnership with Orange, including an extension of a longstanding distribution deal with Orange France for an additional 2 years

Details


Verizon + ItsOn

Company

2008Redwood City

Series D(Dec 2015)

Founded

Initial Investment

A cloud-based smart services platform enabling wireless carriers to fundamentally change how mobile services are marketed, delivered, and consumed

Cloud-based OSS/BSS

Description


Initial investment by Verizon Ventures in 2015 (other investors included Delta Partners, Andreesen Horowitz, and Tenaya Capital)

Although solution helps carriers configure, market and sell mobile services, Verizon was not a carrier customer at time of investment

Verizon invested because of technology aligned to core business “ItsOn’s expertise and ability to successfully develop and bring this technology to

market made it an easy choice to invest” – Verizon Ventures Director

Details


Benefits:

Regional/demographic structure and expertise

Access to resources and channels without losing equity

Telecom enablement partnership

for telcos

for startups

+

+

Examples:

Local joint ventures and partnerships


PLDT + Rocket Internet

Partner

2006Brooklyn

Founded

Engaged in print, event, music, online, television, and feature film business activities

Description

Joint venture to foster the development of internet-based businesses in the Philippines by: Leveraging local market and business model insights Facilitating commercial, strategic and investment partnerships Enabling local recruiting and sourcing Accelerating the rollout of online startups

Details

Philippines Internet Group

Partnership Entity

Ecommerce



Verizon + Hearst / Vice Media

Partner

2007Berlin

Founded

An internet platform that identifies and builds proven internet business models

Description

In 2015, Verizon struck a deal with Vice Media to license food, travel and other video programming, prior to rollout of Go90

Beginning of Verizon’s expansion into digital entertainment and advertising technology, leveraging Vice Media appeal to Millennial viewers

In 2016, Verizon and Hearst (a key stakeholder in ViceMedia) announced 50-50 joint venture to develop mobile TV content for Millennials

Details

Verizon Hearst Media Partners

Partnership Entity

Digital Media / Entertainment



2011 2012 2013 2014 2015 1H-20160 0 0 0

102

123

255245

259

0

Global Telecom M&A Volume ($B)

Ultimately leading to an increasing amount of acquisitions in the space


How can a telco be helpful

to you?

What value can you offer a

telco?

Distribution

Connectivity

Data

Reach

Content

Audience

Innovation

Technology

Therefore, startups should be thinking about their own telecom/carrier strategy


Thank you for listening