InMobi doing $31M in monthly revenues?

InMobi, as most folks know is one of the few Indian start-ups that is evolving into a big MNC. The fact that they achieved this in 5yrs is incredible. InMobi has been posting really impressive growth figures. As per their website, they did 93B impressions in Jan 2012. Considering the recent successful IPO of Millennial Media (they are valued at $1.4 B), it’ll interesting to see how InMobi does, when it hits the stock market. However, analyzing Millennial Media’s (MM) S-1 filing from Jan 2012, throws up some interesting figures about the mobile ad space and gives an indication of InMobi’s run rate.

The following table gives an overview of Millennial’s financials

Millennial Media (MM)
  12 months ending Dec 31 Nine months ending Sept 30
  2008 2009 2010   2010 2011
Revenue 6.28 16.22 47.82 29.08 69.12
Gross profit 1.28 4.62 16.22 9.66 26.59
Net Profit -8.35 -7.55 -7.12 -5.37 -0.41

Now doing some quick back of the envelope calculations:

  1. In FY10, Q4’10 accounted for 39% of the MM’s annual revenues. Assuming a similar break-up in FY11, MM’s Q4’11 revenue should be around $44.5M.
  2. Assuming that December makes up about 40% of Q4 revenue, that would amount to $17.8M revenue in Dec’11. As per the S-1 filing, MM did 40B impressions in Dec’11, which translates to roughly 44 cents average CPM in MM’s network.
  3. MM is primarily based in US, whereas bulk of InMobi’s network is outside US and Europe. Assuming that CPMs in the InMobi network are lower (discount of 25%), the average CPM in the InMobi network comes around to 33 cents. With over 93B impressions (Jan’12), that translates to a monthly run rate of $31M*.

$31M monthly run rate is just incredible by any stretch. If we take MM’s valuation as a benchmark, InMobi’s valuation should top $3B.

Way to go InMobi!

* This is a quick back of the envelope estimation and as back of the envelope estimations go, they need to be considered primarily for directional purposes.

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