As we highlighted in a post yesterday, Mobile Social Networking company Xumii has been acquired by Global Mobile Software powerhouse, Myriad Group.

Cunchbase says Xumii had raised US$5.5M in funding from Aussie VCs Southern Cross Venture Partners(SXVP) and CM Capital(CM), so the deal is also a good win for the local VC industry as well.

I managed to track down SXVP Managing Director, John Scull, for a quick chat and this is what he had to say:

The deal is good for the company (Xumii)…we’re very satisfied with the outcome

As for the reason for the deal, he said:

We felt it was a great opportunity to connect with a larger company and benefit from its sales & marketing and networks, particularly Telco networks as they were becoming Xumii’s key customers

Of course I wouldn’t be doing my job if I didn’t try to pry some information about the terms out of Scull, but he did well to repel my efforts!

There’s no official information from either side about the size of the deal, but I thought this would be an interesting one to try and work out without their help.

So what can we figure out about the deal?

• SXVP policy is to take “ a meaningful minority position” in their investments
• SXVP were equal partners with CM in the funding round, meaning we can assume that jointly, CM and SXVP took a meaningful position (rather than both of them taking one)
• What’s meaningful? Let’s assume somewhere between 30-40% particularly for early funding rounds
• Scull wouldn’t divulge the consideration paid by Myriad as part of the agreement (dollars/equity/something else) but the fact that he feels the deal is a great opportunity to partner with Myriad would suggest that there’s still some skin in the game for SXVP and CM
• On that point, however, when asked if it was an “exit” for SXVP, Scull said that there was a sale to a company so in their mind it was an exit.
• As explained in an earlier post – venture funds need to average 4x Gross Returns from exits to make an “acceptable” 2.5x net return to LPs. If that is the case, and considering this has been viewed as an exit, the valuation would need to be around $55M-$75M for the number to be acceptable to the VC firms.
• That 4 x Gross is an average, however. Xumii was becoming a star in a high-interest industry,  so you’d think that SXVP/CM would have viewed it as one of the 2-3/10 winners in their portfolio rather than one of the 5-7/10 failures & walking dead.
• This would mean that they’d expect on average a 6.5x Gross return (according to Fred Wilson)pushing the acquisition valuation to somewhere between $90M-$120M assuming the VCs took somewhere between 30%-40%.

So a valuation of between US$90M-US$120M?

There are a bunch of things that might increase or decrease that though. One interesting factor is the risk still surrounding Xumii as a business. Let me explain:

• Myriad says that the deal won’t materially affect their ’09 Fiscal EBITDA.
• Last report put Myriad’s EBITDA at US$3.3M, so it would seem that anything that doesn’t materially affect that number (even considering growth for ’09) would be pretty small.
• This suggests that the deal, as Myriad says, really is to round out their portfolio of software with a leading solution in a growing segment, rather than trying to add to the company’s bottom line immediately post-acquisition

The risk still inherent in Xumii as a business may have kept the price down.

Then again, Xumii was doing really well in a growing segment, so there may have been some premium above the 6.5x GR needed to get them to sell.

There are other things, no doubt…other offers, the ability of the company to grow without Myriad’s help, synergies within Myriad’s business and so on.

All things considered though, $90M-$120M seems like a fair guess at the range based on expected results (even though my feelings say it’s probably too high)

What do you think?

More great news for Aussie startups with the European-based Myriad Group, a global leader in mobile technology with software in over 2 billion phones, announcing that it has acquired the brand, technology and 17 employees of Xumii.

Xumii is a mobile social networking service that we’ve covered a few times over the past year.

I’ve always thought the technology had great potential and a great team of both employees and advisors, so it’s good to see them move to the next level.

There’s not much information circulating beyond the official press release, but I’ll post another story which looks into the detail of the acquisition later on today.

In the meantime, congratulations to Xumii CEO, Jennifer Zanich and the team.

Image from CreativeSpirits

m.Net Corporationhas released the Australian results of their 2008 Worldwide Mobile Data Service (MDS) Study, revealing growth in the number of Australians using their mobile phone for a wider range of products and services.

m.Net Corporation defines MDS as “all the digital data services that you access through your mobile phone excluding voice calls”. This includes purchasing, communications, information and entertainment.

Of the sample group, 53 per cent owned a 3G or 3.5G phone and the most popular modes of bill payment were capped monthly plan (42 per cent), pre-paid (32 per cent) and uncapped monthly plan (14 per cent)

The key findings from the Australian portion of the study, which spoke to 2000 partiipants in NOvemebr last year include:

• 61% had used information type services in the last full month,
• 57% had used entertainment type services,
• 99% had used communication type services and
• 31% had used their mobile phone to make a purchase like movie tickets.
• Those that visited a website increased from 41 per cent in 2007 to 49 per cent in 2008;
• Mobile Internet searches increased from 23 per cent in 2007 to 30 per cent in 2008;
• Take-up of mobile email grew from 26 per cent in 2007 to 34 per cent in 2008;
• 50 per cent of those that used MDS in 2008 used mobile chat, a 120 per cent hike from the previous year;
• Mobile access to financial data jumped 60 per cent from 10 per cent (2007) to 16 per cent (2008);
• Mobile access to social networking grew 50 per cent from 10 per cent to 15 per cent;
• 33 per cent used MDS for over 30 minutes per week, up by 120 per cent from 15 per cent in 2007;
• 64 per cent of Australian respondents were willing to pay more than $10 per month for unlimited mobile data access, up from zero per cent the previous year;
• Australians are becoming more savvy in how they access mobile data, with the proportion of users who typed in a URL dropping from 54 per cent in 2007 to 29 per cent in 2008;
• Australians are beginning to truly recognise and acknowledge how the use of the mobile phone can tie into their everyday lives: 41% of respondents were interested in mobile banking, 44% were interested in the ability to pay for things with their mobile phone and 31% of respondents were interested in using community sites.

Another outcome of the study was that Australians lagged behind American mobile phone users in the intensity of their MDS usage, with US respondents to the global study using a wider range of data services for much longer periods of time than Australians.

m.Net Research Director, Dr Marisa Maio Mackay, explained this a litle more:

Americans are far more intense and active users than Australians and have really embraced mobile data services in the past few years, partly thanks to ‘all you can use’ fixed pricing plans and the resolution of early network issues

She also added:

While Australians have transitioned from a small group of high level users to a medium group of medium level users over many years, the American market has gone from a small group of high level users to a large group of high level users in just a few years

You’d think that local high speed data service access and costs have played a large part in keeping Australia down. And when you consider that the US has traditionally lagged behind Asian markets like Japan, South Korea, Singapore and Malaysia you start to get a feel for how far behind the 8-ball our local “service” providers have placed us in the race to be real players in the mobile web.

That having been said, there’s good news there for the next Xumii, Mig33 or Pocketlife with good growth in the local market meaning that Australia is making itself a good test-bed, if not a genuine end-market.

Good news following on from our story last week .

Xumii has now been named as one of only 20 finalists for the Mobile Monday Peer Awards 

The winner will be announced in Barcelona on February 16th.

Good luck guys!

Mobile social network and IM aggregator, Xumii, has made it through to the 2nd Round of the MobileMonday Peer Awards 2009.

The MobileMonday Mobile Peer Awards are among the most influential events in the mobile industry and, with over 1000 attendants, the point of reference in startup innovation during the Mobile World Congress.

163 startups participated and 42 nominees (including Xumii) were selected for this round.

Xumii CEO, Jennifer Zanich was pleased to be representing Sydney and Australia at the awards. “We’re quite honoured to be MobileMonday Sydney’s pick! Wish us luck!”

We do wish you luck, Jennifer, and hope that Xumii will go on and win the whole thing.

An international Jury will now select the 20 finalists to present at the Peer Awards event in Barcelona.

The finalists chosen to present in Barcelona will be announced on January 26th (is that an omen?), culminating in a final award ceremony on February 16th.

Hopefully more good news to come…

Kick-ass mobile social network and IM aggregator, Xumii, has just released a new version of their app.

Updates include:

• Check up on your recent chats – The newest chats now have their own tab in the Friend Chat section–check out “Recent.”
• More organized contact lists – Have tons of buddies? Now there are tabs for each social network so that your Facebook or AOL buddies have their own lists.
• Faster start-up – We don’t want to keep you waiting.
• In-Application Sign-up – New users can sign up and add identities from Xumii on their phone.
• Uploading larger images- You can upload photographs larger than 250K from your phone into your facebook, imeem and myspace social networking photo albums.

The fight is still on to see who will dominate the mobile social network/IM space, but the Xumii team are doing their best to maintain their position as one of the favourites.

Check out the official update announcement HERE.

One of the hardest things about doing business overseas is creating the relationships that doing business relies on.

Because of that, I think the ANZA Technology Network people do some really good things for Aussie startups looking to build companies and relationships in the US.

Their next big event is the Gateway to US Summit, which will be held in Silicon Valley on October 20-22.

Included in the summit is a Pitch Day where a line up of Australian and New Zealand entrepreneurs with innovations ranging from enterprise grade system performance, security and decision-making tools to cutting edge health and medical solutions to sophisticated web-based services and social networks will present their companies in a morning session.

Then, in the afternoon, Aussie and Kiwi companies will pit themselves against innovative startups from around the world including companies from Canada, Asia and Europe in a round of two-minute pitches before a panel of Silicon Valley tech experts.

Three companies will qualify for Best in Show prestige and will deliver exclusive 10-minute presentations to our audience of top-level execs, entrepreneurs and investors.

There will also be a panel session featuring some top notch people, many of whom have ties to Australia, including: -

• Jeremy Liew of Lightspeed Ventures
• John Scull and Larry Marshall of Southern Cross Venture Partners
• Jennifer Zanich of Xumii
• Ryan Junee of Omnisio

If you’re in the Valley or plan to be nearby around the 20th-22nd October, this sounds like a great event.

Prices start from $45 if you just want to go to the pitch day and are a member up to $3500 if you want to go through the business coaching days and present.

Details HERE

Mobile social service aggregator Xumii has launched a blog.

Not really news, right?

Wrong!

Xumii is that rare breed of Aussie tech startup that has received VC funding. On top of raising $4.3M from CM Capital and Southern Cross Venture Partners last year, they’ve got a product in the so-very-sexy-at-the-moment mobile social networking space and they’ve got the team at Pollenizer helping them out.

Sounds like they’ve given themselves every chance at success so it’ll be interesting to see where they go from here.

Whether its massive success, down in flames or something in between, at least we’ll have a front row seat.

Keep the posts coming guys