The Mobile & Telecom sector was the bronze medal winning sector based on investment dollars and deal volume in Q3 2009 with $803M being divided across 52 deals.  (Our analyses of the gold medal winning sector, healthcare, and the silver medalist, internet, can be found in posts as well)

On a deals basis, mobile software & services was the predominant industry within mobile & telecom comprising 52% of deals but representing only 14% of funding.  Over 70% of funding actually went to Towers & Infrastructure investments (45%) and Telecom Devices & Equipment (26%) with these more capital intensive industry categories driving up the aggregate sector’s average deal size to $15M.  While we’d previously detailed that iPhone apps have garnered over $100M of venture capital investment and also, to many peoples’ surprise, that the iPhone platform is not the predominant mobile OS for venture-backed mobile companies, this quarter’s results demonstrate that venture capital investors are funding the infrastructure elements that will enable the mobile software & services that garner so much attention.

Q3 2009 saw mobile & telecom investment funding increase over the course of the quarter similar to the national observed trend of a strong finish in September.  September results were driven by several large deals resulting in more than 50% of the quarter’s mobile & telecom funding coming in the final month.

Mobile & telecom companies receiving money over the quarter came from across the maturity spectrum with 28% of the deals in the quarter going to early stage companies as part of Series A deals and 28% going to more mature companies receiving Series E+ rounds.  The national VC trend for the quarter was 28% of deals being Series A so the mobile & telecom sector was consistent with this.  The average mobile & telecom Series A deal stood at $2.3M.  The proportion of money, however, going to Series E+ deals in mobile & telecom was much greater than the national average which stood at 12% given several large deals going to the aforementioned towers & infrastructure and telecom devices & equipment industries.

The states with the most mobile & telecom investment activity didn’t offer up much in the way of big surprises.  California which was 45% of deal flow across all sectors was only 42% of mobile & telecom deals.  Texas, Colorado and Washington all garnered more deal volume in mobile & telecom relative to their national deal averages.

Of all the sectors, the strong overall showing for Mobile & Telecom in Q3 2009 is amongst the data points likely to be the most volatile going into Q4 as several large infrastructure deals quite significantly impacted the overall numbers.   That said, the investment in the mobile software & services industry which comprises a portion of the overall mobile & telecom sector has seen consistently growing deal flow momentum throughout the year which may not abate.  However, as always, the data will confirm next quarter if Q3 2009’s mobile & telecom numbers are an anomaly or the new normal.

Note:  Soon, we will be releasing a feature that will provide users with access to the  underlying deal and funding data that form the basis of this and other quantitative ChubbyBrain analyses.  If you’d like to be notified when this capability launches, please email us at insights(at)chubbybrain(dot)com.