Gaming companies represented 42 per cent of venture capital deals in mobile during the first quarter, according to CB Insights. Advertising was the second-largest beneficiary of deal flow, at 9 per cent.
Overall, there were 106 mobile VC deals in mobile during the quarter, down from 122 a quarter prior. Total investment dollars were $718 million, meaning it was the second largest quarter after the third quarter of 2012, when VCs poured $968 million into mobile.
It’s not surprising that games were the big draw for VCs. Not only do games account for the largest share of consumer time spent on mobile, they are also the largest money makers in the app store. Additionally, mobile gaming companies require relatively little overhead and enjoy a potentially big payoff if a game becomes a hit in app stores.
Mobile security, meanwhile, drew only 3 per cent of deals, but grabbed a whopping 30 per cent of investment dollars in the quarter, reflecting worries about how to secure the all the data produced by Internet-connected mobile devices.
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