HONG KONG, Dec 12, 2018 - (ACN Newswire) - On December 12th the mobile advertising company Mobvista became the latest tech company to list its shares on the Hong Kong Stock Exchange, following in the footsteps of Xiaomi and Meituan.
At the official ceremony to mark the listing of the company Robin Duan, the founder and CEO of Mobvista, thanked all the staff for making the vision of the IPO a reality. Like Duan himself, Mobvista has achieved a lot in a short space of time. So how did he and his company grow up so quickly?
A company built to serve the new mobile economy
Founded in 2013, Mobvista provides mobile advertising and mobile data analytics services to the global ecosystem of app developers. The company has created an end-to-end offering that meets customers demands for advertising, monetization and mobile analytics; the whole mobile marketing lifecycle.
In just five years since its establishment, the company has become the largest third-party mobile advertising platforms, and one of the top-ten in the world. So how was this achieved?
Many in the industry believe that its success stems not just from its business model, but is closely linked to how Duan and Mobvista had foreseen changes in both the domestic market and the international market.
Industry data predicts that the global spend on mobile app promotion will continue to grow by 16% year on year until 2022. The market for programmatic advertising - that's advertising which is targeted using complex AI - was $27 billion in 2017, and is expected to grow to $69 billion in 2022.
With the global shift to the mobile internet as the most common means of going online, and the corresponding shift in advertising spend away from the desktop and onto mobile, mobile advertising has emerged as a new, exciting and fast-growing industry.
"The best decision we have made after creating the Mobvista was to think big and focus on the international market. With many millions of adverts placed every day thanks to our technology with is based on big data and intelligent algorithms, we can connect advertisers and users all around the world. With so many companies looking to grow and launch in new markets, our global approach is exactly what they need. We have created a company with the right mix of technology and expertise to help our customers succeed," said Duan.
It's this global vision which has helped Mobvista grow to become the latest tech Unicorn - a company valued at more than $1 billion - to list on the Hong Kong Stock Exchange. But whereas many other tech companies gain high valuations based only on potential, Mobvista is already consistently profitable.
Mobvista's revenues were $158 million, $268 million and $312 million over the past three years respectively - an increase of more than 40% year-on-year. Even better, the company's profits grew by an impressive 77% per year over the same timeframe. Net profits were $8.71 million in 2015, $19.78 million in 2016 and $27.32 million 2017.
The "JCDecaux" of the mobile market
European company JCDecux is one of the giants of the advertising world, reaching billions of people every day through its dominance of the outdoor media landscape. It is a company that Duan views as similar to Mobvista in many ways.
"Simply speaking, we have created an online version of the JCDecaux, where we can reach the widest audience possible through an array of different advertising formats. Where they offer brands a way to reach people through outdoor media, we have created a media landscape focused on millions of long-tail mobile apps. And just like traditional advertising companies, we help our customers to find the right mix of advertising to reach their specific audience."
Mobvista's technology allows it to place advertisements into mobile apps which are connected to its advertising platform, using detailed targeting and demographics to deliver adverts which are more likely to appeal to users. At the same time, Mobvista can help app companies to sell space in their apps to advertisers looking to reach users of the app in question, helping them to monetize their apps.
As more apps are connected to the platform and more adverts served, the amount of data that Mobvista can use to understand user behaviours continues to increase. Through real-time AI modelling of this anonymised data, the accuracy of the advertising can be continually improved.
It's this AI technology which is the most exciting, as companies both upstream and downstream (known in the industry as the supply side and the demand side) can benefit from its intelligent targeting. By connecting advertisers, developers and users across the mobile ecosystem, Mobvista is effectively building a 'closed loop', where it adds value to every stakeholder.
When looking at where future growth is likely to come from, Duan sees business to business services as an emerging market for mobile advertising. The growth of mobile consumers has slowed as most markets now reach saturation, and there is no longer a big demographic divide between the mobile haves and have-nots. However, many consider the B2B market as a trillion-dollar opportunity over the coming years.
And it's not just Mobvista that's thinking this way. Internet giants such as Alibaba and Tencent have made structural adjustments and shifted their business focus towards these enterprise-level services. This B2B approach is not new for Mobvista, which has been providing services for Chinese companies going global since its inception. But the shift towards B2B by some of China's biggest tech companies is an indication that it's a market that will become more important moving forward.
What Is Mobvista's Future as a public company?
Another key success for Mobvista and its big data and AI technology has been its work with several top domestic Internet companies such as Baidu, Alibaba, 360 and Tencent. Mobvista has helped them enter overseas markets and attract billions of new users outside of China.
Duan sees three distinct stages where his company can help this particular customer base. Firstly, helping Chinese Internet companies to obtain new users overseas. Secondly, helping them monetize their apps once they have grown their userbase. Thirdly, creating synergy between brand and performance, where the growth in user numbers is linked to building brand value and affinity.
Of course for any company that decides to go public, investors are keenly interested in plans for the future. For Duan, going public in Hong Kong is only the beginning. His views on the future are captured in the IPO prospectus, which goes into detail on Mobvista's plans to increase R&D investment, promote business growth with technologies, and expand its leadership in the market.
Research and development are extremely important to Duan; after all, the company relies on its technology for its success. Currently, almost half of the global headcount works in R&D, and the post-IPO plan is to continue with this level of investment.
Duan is also actively looking for high-quality investment and acquisition targets that could complement the existing product and technology mix. This is nothing new to Mobvista after it successfully acquired two companies in 2016.
But perhaps the most important focus for Duan and the Mobvista team will be to continue to implement the operating model they call "Glocal". This is the concept of being able to offer customers truly global scale, whilst retaining high levels of local expertise, to help companies build success in new markets. Duan and his team believe that application developers in China and other emerging markets who have global ambitions will be an important driver of its future business growth.
It's clear that Duan and Mobvista have achieved a lot in a short space of time. But it's also clear that, in such a fast-growing and innovative industry, there is a long way to go - a journey that's certain to include twists, turns, and exciting new possibilities.