Wonderful work startup mode: buying a small company to make money the Yello Mobile

cloud network hunting note: successful companies often should rise “, geographical and human conditions “. Yello Mobile male department of keen insight into the Asian market demand and after merger and acquisition mechanism, should be formed, not only in one year bought 61 startups, has hit South Korea risk investment mechanism. This article take you look Chinese, witness business competent industry giants.

in recent years, marissa mayer at the helm of Yahoo is “thunder, little rain”. Since she took over Yahoo in 2012, and on the acquisition of a series of the company, to $1 billion in bursts, small Summly to $30 million, is very conspicuous.

but turned out to be ineffective. Mayer during his tenure, bought nearly 50 companies, but momentum is hide the fact that its financial performance let investors understand simply buy, not expediency development channels.

studio mode also being questioned. The model with Facebook platform products such as the company’s fundamental difference lies in its reliance on liquid product portfolio. In mobile company, this business model is generally used in game industry, Hollywood movie studios on entertainment licensing products sometimes use this structure.

however, there are clear from the company, the startup application proves that the studio mode can be independent of pure entertainment, and with the incredible speed at which the average monthly five purchase other start-ups.

it’s was founded in 2012, South Korea startup Yello Mobile, the company has so far include 74 app, including 61 takeover last year. Not only such, its acquisition speed there is no evidence of a bit slow, want to make acquisitions in 2015.

in recent years, Asian mobile phone usage by leaps and bounds, especially in South Korea, its smartphone penetration is 75%, and also into wireless devices to the time of 5 g technology. Yello Mobile company seize the opportunity comes once in a blue moon.

however, South Korea’s cutting-edge mobile phone technology and service providers utterly failed to keep pace with soaring growth of mobile phone penetration rate. A gap appeared between user demand and supply enterprises. Yello Mobile CEO Lee Sang jun – hyuck said: “in addition to the game and communications applications, there is many to be the development of niche markets in Asia. We look at these niche markets, not only support one of the best company, also to develop these markets.”

Yello Mobile’s goal is to set up 2 to 3 years, with the development of the market power is difficult to startup. The company is good at helping them fast development, the implementation of thoroughly remould oneself grow up. Coocha, for example, from the electronic commerce merchants gather data, then feedback to the user application. Wan Yue it has 85 active users, but in May 2013 by Yello acquisition, its users, jumped to 3 million. And its sales revenue is from the original $160000 to $810000.

although the application of revenue models vary, but advertising is still located in the center position, the company’s acquisition also interested in advertising on the ability to build. Yello Mobile with South Korea’s second-largest Mobile AD network Cauly (also called the Future Stream Networks), there are 12000 applications use the advertising network. Yello Mobile in 2014 for $27 million acquisition of the company, the monthly profits increased from $100000 to $1.2 million.

as its portfolio build, Yello Mobile synergistic effect is more apparent, such as its advertising network can realize the application of cross promotion. While studio model sustainable development of the marketing and distribution costs continue to drop and the potential value of each acquisition and therefore to improve.

Yello Mobile seized the opportunities are not limited to the rapid growth of user requirements. South Korea and most of Asia’s underdeveloped m&a market is also one of the reasons for this opportunity. Although South Korea in recent years the rise of the thousands of startups, but every year of mergers and acquisitions are few and far between. From MergerMarket estimates of South Korea’s quarterly deals less than 80.

investigate the root cause, because big companies such as samsung to oneself not r&d technology lack of purchase intention. Samsung’s purchase behavior can be said to be a handful, so last summer to buy SmartThings is surprise. Because of South Korea’s capital market development level is unable to compare with the United States, the difficulty of mergers and acquisitions so increase a lot.

at the moment the Yello has superior conditions to is, on the one hand, the application of the low purchase price anomalies, especially compared with the United States the m&a market. Yello acquisition startup costs to an average of $3.6 million, which acquired in 2014 amounted to 61 start-up companies spent only $61.

while on the other hand performance on investor returns. Cheap acquisition mechanism of venture capital the impact on the south. South Korea’s entrepreneurs have found that even in the field of science and technology to 10 times the valuation to the financing is still very difficult. Yello, according to the application of the investors from mergers and acquisitions nearly 2 times earnings, greatly improved their investment enthusiasm.

Yello strategy is not only beneficial to their own profits, the development of South Korea’s startup ecosystem is also crucial. Almost double the revenues has left investors not only don’t need to risk investment spending, this will no doubt to “bankruptcy or destroy” South Korea important influence the risk of investment structure. If looking for a reasonable financing channels for startups, vc activity in South Korea may soon be able to form a virtuous cycle.

although the user requirements and cheap acquisition has created the success of the Yello mode, but the merger and acquisition also inevitable need to venture capital. Yello has received about $161 million in venture capital, the recent $100 million in financing by Formation8 collar. This round of funding to the Yello valued at $1 billion, and is expected to rise in the next few weeks. Lee Sang jun – hyuck prepares for the 2016 nasdaq listing plan, it will be to show investors the rapid technological development in Asia.

Yello with Yahoo to studio application mode, its further success not only need to prove to investors that their model is beyond the synergies between the Yahoo, emphasis on its application, also need to grasp market opportunities in Asia.

if the Yello large acquisitions can build into a stable portfolio, then it can complete the despair of Yahoo currently project: makes the huge potential of mobile phone media business.

Source: TC