SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review January 4th, 2016 Bi-monthly Highlights Global Trends • Majority Of Mobile Apps In China Don’t Retain Users For More Than A Week China may be the world’s largest app market when it comes to downloads, but new data indicates that those download numbers aren’t translating into loyal users who return to apps on regular basis. According to a report from eMarketer, citing data from Alibaba-owned analytics platform Umeng, the majority of mobile applications launched in China struggle to retain users. In fact, most apps don’t engage users for more than a week, the research indicates. The Umeng report, which was based on data from the apps tracked on its platform – the firm tracks 780 million smart devices in China, it says – found that no category of mobile application has retained even a quarter of its users after the first week. The best-performing apps get close to that number, however. Educational and learning apps retain 23.6 percent of their users over the first week, and finance and wealth management apps do roughly as well, with a 23.5 percent retention rate. Health apps, navigation/GPS apps, and lifestyle are next in line, retaining at least one in five users one week after they launch. • Email personalization is the antidote to declining click rates, and the key to high returns Email is still the leader in marketing return on investment, and the preferred channel for customers, too. But not everything in the world of email marketing is looking up, according to a new study authored by VB Insight’s Andrew Jones. The report shows that email is seeing a decline in click rates, largely because people have less time and less patience. Irrelevant content is being punished in the most terminal way — via the dreaded unsubscribe link. The increase in relevance gained from email personalization reduces the rate of unsubscribes. In a survey of 257 email marketers, a large majority reported an increase in open rates and click-through rates (CTR) by employing email personalization of some kind. And those tactics included the most basic types of personalization. Experian Marketing Services has found that subscribers who receive its personalized content have not only higher opens and CTR, but a 6x increase in transactions. • Facebook Messenger and Snapchat declined in popularity among college kids this year Though Facebook and Instagram still reign supreme among apps, it looks like Messenger is losing steam with younger users. A new poll from WayUp queried 1,000 college students around the country about their favorite apps and found some fairly expected results. Facebook, Instagram, and Snapchat remain students’ go-to entertainment apps. According to this study, the majority of apps that students use revolve around social media. Among smaller brands, students cited Pinterest and Spotify as must-haves. While a number of apps saw a drop-off in mentions at the beginning of the school year, two apps have continued to maintain student interest. Two photo-sharing apps, VSCO Cam and Instagram, grew consistently over the year. What was surprising about the study was the top three apps in decline. WayUp found that Facebook Messenger, Snapchat, and Venmo were mentioned less and less frequently over the course of the year. WayUp says it’s possible that students were initially intrigued by the novelty of Messenger after its split from Facebook, but that its charm could be wearing off, since it hasn’t introduced new features in a while. Its recent partnership with Uber could possibly reverse that trend. SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 1 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review January 4th, 2016 Asia Pacific China • UploadVR raises US$1.25M in funding from China’s Shanda Group A year ago, UploadVR was formed as one of many meetups for developers interested in virtual reality. The company has raised US$1.25 million in seed funding from China’s Shanda Group. After Facebook bought Oculus VR for US$2 billion in the spring of 2014, the rage around VR grew. Taylor Freeman and Will Mason started their meetup to build a community around virtual reality enthusiasts in Silicon Valley. The company also started its own web site for VR news, and that is what drew the attention of investors. Shanda Group is a private investment firm owned by Tianqiao Chen, a game industry veteran. It has invested in other VR and augmented reality (AR) startups, including Solfar Studios, an Icelandic VR game developer. Shanda Group has US$5 billion in assets under management, and it is focused on the virtual future. “With the investment, UploadVR will retain full control over the content on the site and will continue to operate with a high standard for editorial ethics,” Mason wrote. • Ambi Climate is gunning for US$2 million to become the ‘Nest of Asia’ In mid-November of last year, Hong Kong-based startup Ambi Climate raised US$115,000 on Kickstarter (off a goal of US$25,000), to build a “smart add-on for your air conditioner,” complete with an iOS and Android app that acts as a monitoring and control hub. The US$179 Ambi Climate unit is a small, plastic, white rectangular device that doesn’t feel especially premium, but is good enough for a first generation product. While not currently incubated at any accelerator, founder Julian Lee said the team enjoys a “good relationship” with Hong Kong-based hardware accelerator Brinc, whose PMQ (Central) location is just up the road from Ambi Climate’s office in Sheung Wan. Going into 2016, Ambi Climate is looking to raise US$2 million. • Team behind Chinaccelerator launches mobile-only accelerator in Taiwan aimed at ‘next four billion’ SOSV, the venture capital firm behind Chinaccelerator, announced Mox, a new accelerator program based in Taipei and designed for startups aiming to develop a presence in South and Southeast Asia, South America, Africa, and Eastern Europe. The accelerator is targeting the “next four billion” – that is, the current portion of the world’s population who are still largely offline. Startups accepted to the program are required to have mobile-only businesses. All companies admitted to Mox will receive an initial US$500,000 in free advertising promotion, and will have access to monetization methods in target countries. In exchange, Mox’s standard requirement will be 6 percent of common stock in each startup. The eight-week accelerator will begin its first batch on January 4, with its first planned demo day on March 3. The inaugural program will launch with eight companies. • Freemium is not the only way: VMFive gets US$6m series A to turn ads into playable demos The angle taken by VMFive is to create a system whereby app developers can offer people a way to try out an app or game without having to download anything. Essentially, it’s an ad that you can play. “The playable ad is the future of mobile ads,” says Jessie Wu, director of marketing at VMFive. The Taiwan-based startup last week revealed a series A funding round worth US$6 million. The investment comes from CDIB Partners, Trend Micro, GMobi, and Cherubic Ventures. For now, VMFive, boosted by its series A funding, is looking to expand to new markets. “AdPlay is targeting markets with a mature mobile gaming and advertising industry, and good wireless internet infrastructure as well,” says Jessie, explaining why VMFive is now focusing on Japan and South Korea. “Both of the countries ranks top five on Google Play’s game revenues list.” China is next. • Alibaba to pump US$1.25 billion in Chinese online food delivery service ele.me Alibaba Group Holding Ltd has agreed to invest US$1.25 billion in Chinese online food delivery service ele.me. The agreement, reportedly inked on 17 December, will see Alibaba become the majority stakeholder with 27.7 per cent of shares. It is expected to be competed after the Spring Festival in China in February 2016. This latest round of funding comes after Ele.me, which roughly translates as “Hungry now?”, raised US$630 million in August this year. Its valuation is estimated at US$4.5 billion now. With Tencent Holdings also an investor, Ele.me now has two members of the pyramid of power collectively known as “BAT”, which also includes Baidu SparkLabs Global Ventures (http://www.sparklabsglobal.com) is a global seed-stage fund with partners in Silicon Valley, Chicago, London Tel Aviv, Singapore, and Seoul. 2 SparkLabs Global Ventures’ Technology and Internet Market Bi-Monthly Review January 4th, 2016 and Alibaba, backing it. The trio have been actively making power plays in the China’s internet business landscape this year. Korea • Korea’s Yello Mobile Raises US$47M More at A US$4B Valuation Led by Formation 8 Korea’s Yello Mobile has made a name for itself raising US$100 million and using it to hoover up more than 80 startups to build its mobile apps business, which now serves 18 million users. Now, Yello Mobile is raising again: it has racked up another US$47.2 million in financing, led by existing investor Formation 8. The funding comes as convertible debt at a US$4 billion valuation. To date, the company has raised just under US$210 million. “We are proud of the progress we have made establishing Yello Mobile as the clear mobile leader across the SMATO verticals,” said Lee Sang-hyuk, founder and CEO of Yello Mobile.