M&A Alert—December 5, 2016
The Mobile Majority acquires location leader Gimbal
Author: Eric Risley, John Ascher-Roberts
Transaction Size: Undisclosed
On December 5, 2016, The Mobile Majority (TMM) announced an agreement to acquire Gimbal, a location data intelligence platform which had been spun out of Qualcomm in mid-2014. Architect Partners served as exclusive financial advisor to Gimbal on this transaction.
With explicit consumer permission, Gimbal gathers and analyzes location signals derived from over 125mm U.S.-based mobile phones as these consumers navigate their daily lives. Gimbal’s platform captures instances where the phone is in proximity to over 2 million locations in the U.S., using both geofences and Bluetooth beacons. These location-derived consumer insights are used by consumer brands, retailers, advertisers, app publishers, venues and out-of-home networks to inform and tailor their marketing interactions with consumers.
Gimbal’s SDK (software development kit) allows for the collection of the location signals and is used by over 250 mobile app publishers who publish 600 mobile apps. Their SDK is passive, highly phone battery efficient and always-on in the background, allowing continuous monitoring of phone location.
Customers and partners include Shazam, Ruckus Wireless, Touchtunes, RetailMeNot, Dunkin’ Donuts, the Cleveland Cavaliers, and Accuweather. Competitors include Foursquare, PlaceIQ, NinthDecimal and xAd.
The San Diego-based company was conceived and incubated within Qualcomm before being spun out in May 2014. Post-spinout, the company received $26.25M in funding from investors including Qualcomm, i-Hatch Ventures, Ajax Partners and Jonathan Kraft.
The Mobile Majority serves both mobile publishers and advertisers. Mobile publishers use TMM to better understand their own users/customers by utilizing insights derived from both their own internal data on these users and purchased third party data sources. This allows for the creation of well-defined audience segments / audience profiles which are then sold to advertisers at premium rates. TMM’s advertiser customers utilize TMM’s demand-side platform, Adsynergy, to reach these targeted audience segments with precision and effectiveness. The company counts over 200 million mobile users matched with personally identifiable information and over 900 million device IDs. Its partners and customers include CBS, Hulu, USPS, Gannett and Majority Strategies.
Rob Emrich, CEO, and Sam Kim co-founded the Santa Monica-based company in 2012. TMM has received over $20 million in funding from high net worth investors.
The deal value for this private-to-private transaction was not announced.
Comparable transactions include xAd’s acquisition of WeatherBug in November of 2016 (undisclosed, covered here), Ebates’ acquisition of Shopular in March of 2016 (undisclosed), Tyco’s acquisition of Shoppertrak in December of 2015 for $175M (2.3x LTM revenue, covered here), Nielsen’s acquisition of eXelate in March of 2015 for $200M (6.3x invested capital), Acxiom’s acquisition of Liveramp in May of 2014 for $310M (11.0x LTM revenue, covered here), SK Planet’s acquisition of Shopkick in September of 2014 for $250M (9.5x LTM revenue), and eBay’s acquisition of Where in April of 2011 for $135M (7.9x LTM revenue, covered here).
This combination is all about the value of location data. Gimbal offers insights into how real people (fully anonymized) move about the physical world throughout their day. Understanding these patterns creates the ability to deliver ads and mobile experiences based on precise location awareness in virtually real-time. Perhaps more valuable is the ability to better understand and characterize a person’s interests, stage of life, demographic profile, and possible purchase intent by analyzing locations visited and patterns over time.
Gimbal’s strengths include: 1) SDK relationships and certain data sharing rights with 250 app publishers with over 125mm monthly active users; 2) the ability to determine precise location, indoors or outdoors, using both i) location services inherent on mobile devices and ii) via their large installed base of geofences and Bluetooth location beacons; and, 3) the ability for location-sensing capabilities to be “always on” due to sophisticated power management capabilities designed to limit phone battery drain.
Gimbal’s location insights allow app publishers to build even more precise understanding of their audiences therefore enabling them to charge more for their advertising inventory, justified by better ROI for their advertiser clients.
Architect Partners’ Observations
According to BIA Kesley, location-targeted mobile ad sales are expected to rise from $9.8 billion in 2015 to $29.5 billion by the end of 2019, a 24.6% compound annual growth rate. Although mobile search is still expected to dominate most of that ad spend, we expect to see that dynamic change as advertisers have more diverse ways of delivering location-specific ad or marketing campaigns, such as triggered push notifications and in-app advertisements.