Since spotting mBlox in Spark Ventures plc’s bargain basement of odds and sods, I have been intrigued as to why this baby hasn’t grown up after almost 14 years of suckling the milk of the venture capitalists on both sides of the Atlantic. It’s like surrogacy gone mad. Don’t get me wrong, I can understand how comforting it must be to snuggle up to such rich bosoms but there comes a time when such attachments pose serious Oedipus complex risks.
As a LogiBod, I feel a certain affinity to mBlox since they’re banging away at a technology that was pioneered when my beard was still soft and jet black. I’m so romantic that I follow them on Twitter. I have dreams of the CEO being transformed into Austin Powers, jumping out a pimped-up ride and shouting “Yeah baby! I’ve got my mojo back and I’m coming after you Foxxy Brown.” Basically, the IPO moment.
At this point I have to disclose that I hold a position in Spark Ventures plc which is listed on the AIM exchange in the UK. It’s one of those positions that remind me of being a 14 year old who naively went to see the Exorcist at the local cinema. As someone, who grew up opposite a large open cemetery, returning home was surreal. I must have broken Usain Bolt’s records several times over in covering the 400-600 yards from the abattoir at one end of the cemetery to my gate at the other end of the cemetery trying to avoid the attentions of marauding demons. A governance nightmare. I also hold positions in Avanti Capital, another AIM listed company and early investor in mBlox.
I will cut to the chase. As a forager, I don’t really care much for EBITDA, EPS multiples, diluted or not. Just good old fashion value stripping.
How much dosh did the parents spend on this late developer and what is the payback. Being prudent, I would think everyone would be happy with a 5 times multiple on their cash injection. The most likely scenario (M) hovers around what Uncle Sam would expect for lending his treasury money for 15-16 years.
| P | M | O | FV | ||
| Funding Series | Funding ($m) | 2.0% | 3.0% | 5.0% | Age |
| Early rounds [Jan-01] | 8.00 | 10.98 | 12.84 | 17.46 | 16 |
| 0.00 | 0.00 | 0.00 | 15 | ||
| Series B -$8.1m [Jun-03] | 8.10 | 10.69 | 12.25 | 16.04 | 14 |
| 0.00 | 0.00 | 0.00 | 13 | ||
| Series C -$10m [Jul-04] | 10.00 | 12.68 | 14.26 | 17.96 | 12 |
| Series D -$25m [Mar-06] | 25.00 | 31.08 | 34.61 | 42.76 | 11 |
| 0.00 | 0.00 | 0.00 | 10 | ||
| Series E -$22.5m [Dec-07] | 22.00 | 26.29 | 28.71 | 34.13 | 9 |
| 0.00 | 0.00 | 0.00 | 8 | ||
| Series F -$25m [Nov-11] | 25.00 | 28.72 | 30.75 | 35.18 | 7 |
| 0.00 | 0.00 | 0.00 | 6 | ||
| 0.00 | 0.00 | 0.00 | 5 | ||
| Debt funding [Apr-13] | 14.00 | 15.15 | 15.76 | 17.02 | 4 |
| Debt funding [Jul-14] | 25.00 | 26.53 | 27.32 | 28.94 | 3 |
| Debt funding [Jul-14] | 18.50 | 19.25 | 19.63 | 20.40 | 2 |
| 0.00 | 0.00 | 0.00 | 1 | ||
| Total funding | 155.60 | 181.38 | 196.11 | 229.88 | |
| Probably outcome~ | 199.28 | ||||
| Exit multiple x 5 | 996.40 |
~(P+4xM+O)/6
A cool billion? Yeah baby!
Oodutty
OODUTTY 
Great analysis again!
Any news of an IPO?
Are they making money?
Is SMS hopelessly in decline. Need a new business model?
Bob
Thanks Bob. I appreciate your comments.
Regarding SMS being in decline and the need for a new business model, I would recommend this excellent article in the Sunday Times: http://www.thesundaytimes.co.uk/sto/business/Tech_and_Media/article1537266.ece
I’m happy to moderate on such a debate since my humble opinion is influenced by what’s in the public domain.
However, emerging technologies like drones, satellites, WhatsApp and Blackberry Messenger type internet communication can potentially disrupt the mature messaging technology based on telecoms carriers. Emerging technologies with the backing of shed loads of money is no respecter of lifecycle development and can be brutal in its timing. Think Sony Walkman v. Apple iPod.
I may write another piece on the subject when further information is disclosed in the public domain. However, regarding IPO and making money, the correct person to ask is the CEO.