Nov
12
Marco’s Magical Mystery Tour
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Two days at the Old Billingsgate conference centre last week, but for investors and early stage and post start-up information service and technology players the annual Noah conference, moderated by Noah’s co-founder and genial ringmaster/moderator, Marco Rodzynek, has never been a chore but an exhausting pleasure. The meeting seems to go by in a blur – I seem to have written notes on 55 short presentations – and the food, drink and parties all add to the atmosphere. Even the Prime Minister’s office talking about the Shoreditch Tech City sounded upbeat (and a bit spaced out!). Marco and his colleagues shifted the focus a bit this year, and while there were a satisfying number of UK, French and German companies, there was special emphasis on Turkey, Israel and Russia, releasing some really interesting perspectives on those marketplaces.
There were specialist break-out groups for those who wanted to get closer to the action than the variety show on the main stage permitted. And there were a couple of really interesting panel sessions and investor recaps/case studies. Two of these – a session on the digital investment strategy of Axel Springer, and a strange panel on the future of television, which oddly sounded like “everything will change except the primacy of broadcast, schedule and channel” (ie nothing will change) – were mentioned here in Friday’s blog (“Monty’s Flagging Circus”). Both gave food for thought. And it was a good idea to put Priceline (the forgotten man, but now a critical investor), Facebook and eBay up to talk about their strategies. On the other hand there was a muted atmosphere to the music industry panel, with a strong feeling that while some would still like to play the old tunes, the band has moved on for this sector.
It was in the agenda sessions that the real value lay, as a wonderful diversity of information and tech players each gave a 10 minute toot on the trumpet. It almost feels invidious to mention names, but who could fail to be impressed by Fiverr? The global marketplace for services – “turn your hobby into a revenue stream” – is now in 200 countries, has a million listed businesses, and 15% of those see Fiverr as their primary income stream. AVAST, the consumer antivirus player from Prague, now has an installed base of 170 m computers and works in 43 languages. Naturally, it shifts into mobile, with 1 million new Android users joining per month. They have their incremental cost of a adding new customer down to 2 cents per year – and currently, on all devices, 250,000 are joining each day. In conversations around the hall, I heard advocates for Klarna, the online payment system that started in Sweden, has Sequoia and General Atlantic amongst its investors and says it will do 140m euro in revenue this year. Wix (Bessemer, Mangrove, Benchmark) have 27 million users for their quick build website service, and have now built 23 million sites. MyTaxi, meanwhile, one of the start-up school of 2009, report 2.5 million downloads of their taxi calling service as they move it out from Hamburg, across Germany and into Washington DC, Madrid and Warsaw this year. 90 million people download IronSource per month to ease software download problems in a market where 40% of consumer downloads fail. Or consider Schibsted’s LeBobCoin.fr (a mirror of blocket.se), a classifieds site with revenues of 63m euro and an ebitda of 70%. I sat wondering whether this market would turn into matchmaking services, but at the moment, as with Axel Springer, the classifieds business, now unrelated to news and newspapers, is forging ahead.
Are you getting breathless? Have a look at Nordeus, from Serbia, whose TopEleven game has 2.1 million daily active users. Then dash over to hepsiburada.com, Turkey’s most popular shopping mall. In a country without nationwide branded departmental stores, and 50% of the population between 15-45 (40% of internet users are under 25) there has to be a future for shopping. Then check out Russian fashions on KupiVIP.ru, or, if growth is your magnet, look at Spain’s Privalia, strongly selling end of season fashions and competing for Spanish speaking populations of over 500m with only 50% current internet penetration (USA is around 80%). Their demographic profile is the 20-40 age range, they claim more Facebook connections than any other fashion site, 1 in 4 sales are on mobile devices, and their 300 m euro revenues are rising at 100% (400% in Latin America) CAGR. And if you are fed up with stores, try Stuffle for an online flea market – they have done 450k in revenue in the first six months.
And still I have not done justice to the show. WyWy is an interesting Shazam-style service for television. Wynsh has 3 million users who record their wants photographically while the brilliant and beautiful Busuu.com goes from strength as a language learning environment for consumers. The peer to peer element is interesting here, as is the mobile apps angle. Since it is estimated that 2 billion will speak English by 2020 improving performance is going to be a big market. Or Cooliris, claiming to be the no 1 app on the iPad in 75 countries as it helps people manage and present their photographs. I would also like to talk about Skobbler, the navigation site, or the very impressive small loans site Kreditech from Hamburg. Given space, we could look at Wrapp, the social gifting service, or Burda’s HolidayCheck travel review site or Israel’s Conduit (or ask.fm from Riga with 9 m users). But you are now tired and I am exhausted – you need several days to sleep off a Noah conference.
I left with a profound impression of huge growth and energy in Europe on the internet, and a feeling in consumer markets that building a base of a few million users is no longer the problem. Sustaining and renewing that audience is the issue, and it is interesting that the Noah seedlings are now very various in size and shape. And the Noah people are right about something else as well: this is now a dynamic investment market with real growth prospects, especially where European players are able to seek global markets as well as local ones.
Star of the show goes to Yossi Vardi, veteran Israeli investor and doyen of the tech community. Peering into an audience of 1400 paying delegates, he said that while giving a recent speech in Tel Aviv he noticed that a man in the third row had fallen fast asleep. So Mr Vardi pointed to the man next to him and said “Wake him up, he’s fallen asleep”. To which the man next to the sleeper replied “You wake him up – you put him to sleep in the first place”.