1Mby1M Deal Radar 2010: Antenna Software, Jersey City, New Jersey

Following yesterday’s coverage of app developer Applico, today’s Deal Radar post takes a look at mobile app provider Antenna Software. Antenna offers prepackaged mobile apps through a platform that includes hosting and support services aimed at both the employees and customers of the company’s enterprise clients.

Antenna, headquartered in Jersey City, was founded by Peter Semmelback in 1998 with a vision for using mobile and wireless technology to connect people who worked outside a traditional office – at that time, mainly field service technicians – to information and resources no matter where they were. The current president and CEO is James Hemmer, who has more than 25 years of experience in the high-tech and communications industries and has been a senior executive at companies in all stages of development from early stage to Fortune 500.

Many industry analysts define Antenna’s core market as mobile enterprise/consumer applications platform (MEAP/MCAP), a combined estimated $1 billion market today that is expected to grow to $1.5 billion–$2 billion by 2012. But this estimate, says Antenna, does not accurately size the market opportunity. Considering that there are more mobile devices in the world today than credit cards and bank accounts, the company sees a much larger addressable market opportunity unfolding that encompasses mobile Web, m-commerce, m-collaboration, mobile advertising, and mobile content management. To give a a sense of the size and scale of these markets, research expects that nearly 6 billion apps will be downloaded this year alone – up 145% from the 2.4 billion downloaded in 2009. With approximately two-thirds of them paid apps, at roughly $2 an app, the potential is great. Further, mobile use will increase. Morgan Stanley’s Mary Meeker predicts that “global mobile use will only continue to grow with smartphone sales surpassing PC sales in 2012.”

For Antenna, there are a few industries that are low-hanging fruits because they have large mobile populations in their workforce and understand that mobility is critical to their competitive standing and to making their customers happy. These industries are consumer goods, retail, manufacturing, financial services, life sciences, and telecom.

Antenna’s apps serve a variety of purposes. For example, Coca-Cola Enterprises uses an Antenna mobile app for their merchandisers who visit retailers and check stock. The app integrates with a host of internal systems, including those that the company uses for time and expense keeping for all their merchandisers. Xerox technicians use Antenna’s mobile field service app on their BlackBerries as they repair equipment under tight service agreements. Major pharmaceutical companies use Antenna apps to help their sales force interact with doctors more effectively by having their customer and product info at their fingertips instead of having to fire up a laptop. Finally, financial institutions such as ING Direct and E*Trade use Antenna apps for mobile banking and trading for their customers. Pricing is based on client licenses per device for mobile apps and an optional platform license for building apps using Anetenna’s integrated development environment (IDE), AMP Studio. Pricing for apps range between $10 and $20 per month per device, and pricing for platforms depends on the number of devices that are supported.

The mobile market is changing rapidly, and competition for Antenna is increasingly coming more from internal IT builds as developer tools for mobility are maturing and expanding. There is also direct competition from mobiles independent software vendors (ISVs), such as Pyxis Mobile, but larger enterprise ISVs such as SAP, Oracle, and Salesforce are also expanding their own mobile products as they get increased demand from customers.

The company’s funding includes a 1998–2000 angel round with seed money from friends and family; a $17 million Series A led by North Bridge and Polaris in 2001; and a Series B with previous investors and Commonwealth in 2005. Antenna also has a line of credit from Comerica to fund receivables, which it says is useful because most of the company’s business is with Global 1000 companies, so when the economy is bad and these clients are trying to dress up their balance sheets at year-end or quarter-end, it helps to have funding to draw on so that Antenna can pay its vendors promptly. Revenues are approaching $50 million and the company is profitable.

Antenna started by mobilizing large field service organizations in high-tech manufacturing companies and expanded both vertically and horizontally. It has made several acquisitions: MAGs Vettro in 2008; Dexterra, another business-focused app provider in 2009; and most recently Vaultus, an MIT spinout that makes consumer-facing enterprise apps, a few months ago.

Historically, mobility has been seen as a means for enterprises to reduce costs and increase employee productivity. However, with the explosion of mobile apps for consumers, Antenna says that companies are realizing that mobility is now a means to capture new revenue streams and increase customer loyalty and satisfaction. Employee-facing is how things have traditionally been, but Anetenna thinks that now the real opportunity is in consumer-facing apps. This market will be the focus as the company grows.

Antenna says that bulge bracket firms and a number of boutiques have told the company it would be an ideal IPO candidate in a couple of years. They like Antenna’s predictable recurring revenue model and the fact that there are no public pure plays if one wants to invest in mobility, especially after SAP’s acquisition of Sybase. But for now, Antenna is focused on building the business.

Recommended Readings
Antenna Software: Smack in the middle of an Android, iPhone, iPad, BlackBerry world (an interview with James Hemmer on NetworkWorld)
Deal Radar 2010: Avatron Software
Qualcomm’s Incubator Will Invest Millions In Consumer-Facing Projects

This segment is a part in the series : 1Mby1M Deal Radar 2010