Posted on Thursday, Jun 4th 2015
According to a recent market research study by the University of Alabama, over 1 billion smartphones are expected to be sold in 2015. Back in 2013, Google’s Android had surpassed 50 billion app downloads and by the year 2014, Apple had recorded 75 billion downloads. These numbers are expected to grow rapidly in the coming years. By 2017, over 268 billion mobile app downloads would be recorded, translating to nearly $77 billion in revenues.
New York-based StartApp was founded in 2010 by Ran Avidin and Gil Dudkiewicz to help companies leverage the mobile platform. Gil is a serial entrepreneur who had moved to the US from Israel for setting up his startups. StartApp is his third company so far. StartApp began in 2010 when Gil and Ran had an idea of introducing a new business model and a new way for app developers to generate real revenue from their apps.
The idea of StartApp came when the founders realized that most app developers allow for their apps to be downloaded for free. In the mobile world, they get a lot of downloads, but are still unable to make money from them because typical advertisements don’t work well on mobile. StartApp wanted to create a platform that would help app developers in monetizing these free downloadable apps while delivering value to advertising partners. They created a user-friendly kit that lets developers embed revenue generating tools directly in their apps. They essentially introduced search monetization to the mobile app world.
By July 2011, the company had launched its first software development kit (SDK) for app developers called Pay-Per-Download. Within six months of its launch, they had recorded over 1 million downloads of their SDK and grew to 100 million downloads within the next four months. In 2013, StartApp realized the opportunity of InApp ads and released their next tool for app developers.
Their platform enables search applications and other different types of advertisement. By April 2014, more than 100,000 applications had integrated their SDK and they have recorded over 2 billion downloads.
StartApp is also favored by developers because they pay them more than any other ad network and even commit to a certain percent of revenue share. For instance, for In-App SDK, the developer is paid a share of the revenue that StartApp makes from the advertisers whose ads appear in their app. Advertisers pay when a user clicks on an ad or installs an app that was advertised in the app, and each time a user clicks on an ad or installs the advertised app, both StartApp and the developer earn revenues.
StartApp’s detailed financials are not known, but analysts estimate that they earned $19.9 million in revenues in 2013. They are also expected to be profitable despite their higher payouts. No wonder they have managed to grow so far without significant venture funding. They have taken only $4.3 million in funding so far from a Series A round held in 2012 in a round led by Ascent Venture Partners and Cedar Fund. StartApp may not yet be a Billion Dollar Club member, but their phenomenal growth and the growing market opportunity makes them a strong prospect. And I absolutely love their capital-efficient strategy for building the company.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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