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Instagram will require users to provide their birthday
Instagram will begin prodding users to share their birthday with the service, if they haven’t already done so. The company today announced it will now start popping up a notification that asks you to add your birthday to “personalize your experience.” But the prompt can only be dismissed a handful of times before becoming a requirement. The move is a part of Instagram’s larger goal to create new safety features aimed at younger users, the company explains. This includes the teen privacy protections introduced earlier this year, as well as Instagram’s longer-term plan to launch a version of its service aimed at users under the age of 13.
This March, Instagram rolled out new features that made it more difficult for adults to contact teens through its app. Then in July, the company announced a larger series of changes to the default settings for new users under the age of 16. It will now default these users’ accounts to “private” and limit their accounts from being suggested elsewhere in the app. It also now restricts adults whose accounts are flagged as “potentially suspicious” from being able to reach out to other minors or interact with their posts.
Starting this week, Instagram says users who have not yet shared their birthday will begin to see pop-up notifications when they open the Instagram app.
These notifications will appear a handful of times, but at some point, users will no longer be able to dismiss the message by tapping “Not Now.” Instead, everyone will ultimately be required to share their birthday to continue to use Instagram.
The company will also now request you to share your birthday information when you come across a post with a warning screen. These screens, which hide content that’s flagged as sensitive or graphic, are not new. But Instagram has never before asked for a user’s birthday before displaying the hidden content.
Image Credits: Instagram
The birthday entry form itself is not complex. You simply scroll to choose the month, day and year of your birthday.
Of course, kids are commonly known to lie on these entry forms in order to bypass restrictions when signing up for apps. On this front, Instagram has developed AI technology to help it identify accounts were kids may have lied. For instance, it may be able to infer someone’s birthday based on comments left on “Happy Birthday” posts, where the user’s age may be referenced. The company also hints at further plans in this area, noting how it will later require users to verify their age when Facebook’s technology determines a mismatch between the age the user submitted and what appears to be their real age, based on other signals.
That technology is still in the “early stages,” says Instagram, but will involve a menu of options that will allow someone to verify their age.
The need to have users’ birthdays on hand isn’t only meant to power the recently launched teen protection features. Instagram is also working to bring its app to younger users — a decision that’s been met with a hostile response from legislators and consumer advocacy groups alike. In addition, age remains an important data point for ad targeting. Even as Instagram pulled back on the ability for marketers to target teens using interest data or their activity on other apps, it will continue to allow ad targeting based on age, gender and location across age groups.
The company is now one of several to have rolled out added protections for younger teen users, ahead of regulations that would force them to do so. Over the course of this year, TikTok, YouTube and Google have also announced changes to how younger teens can use their services and how they can be targeted by ads, in anticipation of a regulatory crackdown. While each has crafted its own set of teen safety features independently, the changes have largely addressed making the default settings for new teenage users more restrictive.
Instagram says the new birthday pop-up notifications will begin to appear this week on the mobile app and will continue to roll out over the weeks ahead to reach more users.
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The SEC and the DOJ just charged this startup founder with fraud, saying he lied to Tiger and others
Today, both the U.S. Department of Justice and the Securities and Exchange Commission charged Manish Lachwani, co-founder of mobile app testing company HeadSpin, with fraud. The SEC says he violated antifraud provisions, and the civil penalties it’s seeking include a permanent injunction, a conduct-based injunction, and to bar him for serving as a corporate executive or board member.
The DOJ, which arrested Lachwani earlier, has accused him of one count of wire fraud and one count of securities fraud, and the associated penalties if he’s found guilty are more harsh, including, for wire fraud, a maximum sentence of 20 years in prison and a fine of $250,000. If he’s found guilty of securities fraud, he faces a maximum sentence of 20 years in prison and a fine of $5,000,000.
Both the the SEC and the DOJ say Lachwani — who led the six-year-old company as CEO until May of last year — defrauded investors out of $80 million by falsely claiming that HeadSpin had “achieved strong and consistent growth in acquiring customers and generating revenue” when he was pitching its Series C round to potential backers.
By the SEC’s telling, his fabrications were designed to help secure the round at a so-called unicorn valuation. That apparent plan worked, too, with Palo Alto-based HeadSpin attracting coverage in Forbes in February of last year after Dell Technologies Capital, Iconiq Capital and Tiger Global provided the company with $60 million in Series C funding at a $1.16 billion valuation. Forbes reported at the time that the valuation was double the valuation investors assigned HeadSpin when it closed its Series B round in October 2018.
The SEC also says that Lachwani was looking to enrich himself, saying he did so “by selling $2.5 million of his HeadSpin shares in a fundraising round during which he made misrepresentations to an existing HeadSpin investor.” (It isn’t clear from its complaint whether the SEC is referring to the Series C or an earlier round.)
The two federal complaints suggest that Lachwani’s alleged scheming to inflate HeadSpin’s valuation dates back to “at least 2018,” and the DOJ says it picked up momentum when the company was fundraising in late 2019.
More specifically, the DOJ complaint alleges that “in materials and presentations to potential investors, Lachwani reported false revenue and overstated key financial metrics of the company … he maintained control over operations, sales, and record-keeping, including invoicing, and he was the final decision-maker on what revenue was booked and included in the company’s financial records.”
In the investigation that led to the DOJ’s charges, the FBI discovered “multiple examples” of Lachwani “instructing employees to include revenue from potential customers that inquired but did not engage HeadSpin, from past customers who no longer did business with HeadSpin, and from existing customers whose business was far less than the reported revenue,” says the department.
How far off were these collective calculations? The complaint says that ultimately, Lachwani “provided investors false information that overstated HeadSpin’s annual recurring revenue … by approximately $51 million to $55 million.”
According to the complaint, Lachwani’s fraud unraveled after the company’s board of directors conducted an internal investigation and revised HeadSpin’s valuation down from $1.1 billion to $300 million. Indeed, in August of last year, The Information reported that the company was planning to lower the value of its Series C stock by nearly 80%.
The outlet reported at the time that Lachwani had already been replaced by another executive. That person, according to LinkedIn, is Rajeev Butani, who joined HeadSpin as its chief sales officer early last year.
Nikesh Arora, a former SoftBank president and the current CEO and chairman of Palo Alto Networks, helped lead the internal review as a then-director on the board of HeadSpin, said The Information.
The SEC says its investigation is continuing. The DOJ similarly notes in its announcement that “a complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.”
Either way, the outlook doesn’t look very promising right now for Lachwani, who, according to Forbes, previously sold a mobile cloud business to Google and wound up co-founding HeadSpin after Yahoo co-founder Jerry Yang introduced him to Brien Colwell, a former Palantir and Quora engineer who was working at the time on a different startup.
Colwell remains with HeadSpin as its CTO. He has not been named in either the SEC or the DOJ’s complaints relating to HeadSpin.
The company itself, which says it has been cooperating with the government’s investigation, was also not charged.
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Nigeria leads mobile app market growth in Africa as use of gaming apps surge 44% from Q1 2020
The pandemic’s effect on the global app market has not been hard to miss. In the first quarter and first half of this year, consumer spending in mobile apps hit new records at $32 billion and $64.9 billion, respectively.
In Africa, it can be tough to call out exact numbers on consumer spending because the continent gets hardly a mention in global app market reports. Yet, other metrics are worth looking at, and a new report from AppsFlyer in collaboration with Google has some important insights into how the African app market has fared since the pandemic broke out last year.
The report tracked mobile app activities across three of Africa’s largest app markets (Kenya, Nigeria and South Africa) between Q1 2020 and Q1 2021.
From the first half of 2020 to the first half of 2021, the African mobile app industry (which is predominantly Android) increased by 41% in overall installs. This was analyzed from 6,000 apps and 2 billion installs in the three markets. Nigeria registered the highest growth, with a 43% rise; South Africa’s market increased by 37% and Kenya increased 29%.
Lockdown numbers
On March 22, 2020, Rwanda imposed Africa’s first lockdown. Subsequently, other countries followed; (those in the report) Kenya (March 25), South Africa (March 27), and Nigeria (March 30).
As more people spent time at home from Q2 2020, app installs increased by 20% across the three countries. South Africans were the quickest to take to their phones as the lockdowns hit with installs increasing by 17% from the previous quarter.
On the other hand, Nigerians and Kenyans recorded a 2% and 9% increase, respectively. The report attributes the disparity to the varying levels of restrictions each country faced; South Africa experienced the strictest and most frequent.
Per the report, gaming apps showed strong performance between Q1 and Q2 2020. The segment experienced a 50% growth compared to an 8% increase in nongaming apps pulled. It followed a global trend where gaming apps surged to a record high in Q2 2020, at 14 billion downloads globally.
In-app purchasing revenue and almost year-on-year growth
According to AppsFlyer, the biggest trend it noticed was in in-app purchasing revenue. In Q3 2020, in-app purchasing revenue numbers grew with a staggering 136% increase compared to Q2 2020, and accounted for 33% of 2020’s total revenue, “highlighting just how much African consumers were spending within apps, from retail purchases to gaming upgrades.”
In-app purchasing revenue among South African consumers increased by 213%, while Nigeria and Kenyan consumers recorded 141% and 74% increases, respectively.
On the advertising front and on an almost year-on-year basis, in-app advertising revenue also increased significantly as Africans were glued to their smartphones more than ever. Per the report, in-app advertising revenue increased 167% between Q2 2020 to Q1 2021.
For gaming and non-gaming apps, which was highlighted between the first two quarters, they both increased by 44% and 40% respectively in Q1 2021 compared to Q2 2020.
Fintech and super apps
In the last five years, fintech has dominated VC investments in African startups. It’s a no brainer why there is so much affinity for the sector. Fintechs create so much value for Africa’s mobile-first population, with large sections of unbanked, underbanked and banked people. This value is why all but one of the continent’s billion-dollar startups are fintech.
African fintechs have grown by 89.4% between 2017 and 2021, according to a Disrupt Africa report. Now, there are more than 570 startups on the continent. Many fintechs are mobile-based, therefore reflecting the number of fintech apps Africans use each day. Consumers in South Africa and Nigeria saw year-on-year growth in finance app installs by 116% and 60%, respectively.
AppsFlyer says that like fintech apps, super apps are on the rise as well. These “all-in-one” apps offer users a range of functions such as banking, messaging, shopping and ride-hailing. The report says their rise, partly due to device limitations on the continent, owes much to the same conditions that have led to a surge in fintech apps: systemic underbanking.
“Super apps remove some of the barriers that these users face, as well as providing a level of customer insight and experience that traditional banks cannot,” the report said.
Daniel Junowicz, RVP EMEA & Strategic Projects for AppsFlyer, commenting on the trends highlighted in the report said, “…The mobile app space in Africa is thriving despite the turmoil of last year. Installs are growing, and consumers are spending more money than ever before, highlighting just how important mobile can be for businesses when it comes to driving revenue.”
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Spotify launches its live audio app and Clubhouse rival, Spotify Greenroom
In March, Spotify announced it was acquiring the company behind the sports-focused audio app Locker Room to help speed its entry into the live audio market. Today, the company is making good on that deal with the launch of Spotify Greenroom, a new mobile app that allows Spotify users worldwide to join or host live audio rooms, and optionally turn those conversations into podcasts. It’s also announcing a Creator Fund that will help fuel the new app with more content in the future.
The Spotify Greenroom app itself is based on Locker Room’s existing code. In fact, Spotify tells us, current Locker Room users will see their app update to become the rebranded and redesigned Greenroom experience, starting today.
Where Locker Room had used a white-and-reddish orange color scheme, the new Greenroom app looks very much like an offshoot from Spotify, having adopted the same color palette, font and iconography.
To join the new app, Spotify users will sign in with their current Spotify account information. They’ll then be walked through an onboarding experience designed to connect them with their interests.
Image Credits: Spotify
For the time being, the process of finding audio programs to listen to relies primarily on users joining groups inside the app. That’s much like how Locker Room had operated, where its users would find and follow favorite sports teams. However, Greenroom’s groups are more general interest now, as it’s no longer only tied to sports.
In time, Spotify tells us the plan is for Greenroom to leverage Spotify’s personalization technology to better connect users to content they would want to hear. For example, it could send out notifications to users if a podcaster you already followed on Spotify went live on Spotify Greenroom. Or it could leverage its understanding of what sort of podcasts and music you listen to in order to make targeted recommendations. These are longer-term plans, however.
As for Spotify Greenroom’s feature set, it’s largely on par with other live audio offerings — including those from Clubhouse, Twitter (Spaces) and Facebook (Live Audio Rooms). Speakers in the room appear at the top of the screen as rounded profile icons, while listeners appear below as smaller icons. There are mute options, moderation controls and the ability to bring listeners onstage during the live audio session. Rooms can host up to 1,000 people, and Spotify expects to scale up that number later on.
Image Credits: Spotify
Listeners can also virtually applaud speakers by giving them “gems” in the app — a feature that came over from Locker Room, too. The number of gems a speaker earned displays next to their profile image during a session. For now, there’s no monetary value associated with the gems, but that seems an obvious next step as Greenroom today offers no form of monetization.
It’s worth noting there are a few key differentiators between Spotify Greenroom and similar live audio apps. For starters, it offers a live text chat feature that the host can turn on or off whenever they choose. Hosts can also request the audio file of their live audio session after it wraps, which they can then edit to turn into a podcast episode.
Perhaps most importantly is that the live audio sessions are being recorded by Spotify itself. The company says this is for moderation purposes, which is a challenge for live audio platforms. If a user reports something in a Greenroom audio room, Spotify can go back to look into the matter, to determine what sort of actions may need to be taken. Moderation is an area Clubhouse has struggled with, as its users have sometimes encountered toxicity and abuse in the app in real time, including in troubling areas like racism and misogyny. Recently, Clubhouse said it had to shut down a number of rooms for antisemitism and hate speech, as well. (Clubhouse says it now records a temporary encrypted buffer of the audio in a room while the room is live for the purpose of supporting incident investigations — a system that has been in place for months.)
Spotify says the moderation of Spotify Greenroom will be handled by its existing content moderation team. Of course, how quickly Spotify will be able react to boot users or shut down live audio rooms that are in violation of its Code of Conduct remains to be seen.
While the app launching today is focused on user-generated live audio content, Spotify has larger plans for Greenroom. Later this summer, the company plans to make announcements around programmed content — something it says is a huge priority — alongside the launch of other new features. This will include programming related to music, culture and entertainment, in addition to the sports content for which Locker Room was known.
Image Credits: Spotify
The company also says it will be marketing Spotify Greenroom to artists through its Spotify for Artists channels, in hopes of seeding the app with more music-focused content. And it confirmed that monetization options for creators will come further down the road, too, but isn’t talking about what those may look like in specific detail for the moment.
In addition, Spotify is today announcing the Spotify Creator Fund, which will help audio creators in the U.S. generate revenue for their work. The company, however, declined to share any details on this front, either — like the size of the fund, how much creators would receive, time frame for distributions, selection criteria or other factors. Instead, it’s only offering a sign-up form for those who may be interested in hearing more about this opportunity in the future. That may make it difficult for creators to weigh their options, when there are now so many.
Spotify Greenroom is live today on both iOS and Android across 135 markets around the world. That’s not quite the global footprint of Spotify itself, though, which is available in 178 markets. It’s also only available in the English language for the time being, with plans to expand as it grows.
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Apple’s App Store facilitated $643 billion in commerce, up 24% from last year
In its antitrust trial with Epic Games, which has just adjourned, Apple argued it doesn’t evaluate its App Store profit and loss as a standalone business. But today, the company put out new figures that indicate it does have a good understanding of the money that flows through its app marketplace, at the very least. The company has now released an updated version of a study performed by the economists at the Analysis Group, which claims the App Store ecosystem facilitated $643 billion in billings and sales in 2020, up 24% from the $519 billion seen the year prior. The new report focuses on the pandemic impacts to apps and the small business developers the App Store serves, among other things.
It also noted that about 90% of the billings and sales facilitated by the App Store actually took place outside its walls, meaning Apple took no commission on those purchases. This is up from the 85% figure reported last year, and is a figure Apple has been using in antitrust battles to paint a picture of an App Store that facilitates a lot commerce where it doesn’t take a commission.
The study then broke down how the different categories of App Store billings and sales were distributed.
Apple takes a commission on the sales of digital goods and services, which were $86 billion in 2020, or 13% of the total. But another $511 billion came from the sale of physical goods and services through apps — think online shopping, food delivery, ride hailing, etc. — or 80% of the total. These aren’t commissioned. And $46 billion came from in-app advertising, or 7% of the total.
The larger point being made with some of these figures is that, while the dollar amount flowing through apps being commissioned is large, it’s much smaller than most of the business being conducted on the App Store.
The report also noted how much of that business originates from China, which accounted for 47% of total global billings and sales ($300 billion) versus the U.S.’s 27% ($175+ billion).
Image Credits: TechCrunch
The study additionally dove into how some App Store categories had been heavily impacted by the pandemic — particularly those apps that helped businesses and schools move online, those that offered ways to shop from your phone, or helped consumers stay entertained and healthy, among other things.
This led to a more than 40% increase in billings and sales from apps offering digital goods and services, while sales in the travel and ride-hailing sectors decreased by 30%. While the latter may gradually return to pre-pandemic levels, some of the acceleration driven by the pandemic in other categories — like online shopping and grocery delivery — could be here to stay.
To break it down further, general retail grew to $383 billion in 2020, up from $268 billion last year. Food delivery and pickup grew from $31 billion in 2019 to $36 billion in 2021. Grocery shopping jumped from $14 billion to $22 billion. But travel fell from $57 billion in 2019 to $38 billion in 2020, and ride hailing dropped from $40 billion to $26 billion. (None of these categories are commissioned.)
The study then continued with a deep dive into how the App Store aided small businesses.
Highlighting how smaller businesses benefit from a tech giant’s ecosystem is a tactic others have taken to, as well, in order to shore up support for their own operations, which have similarly been accused of being monopolies in recent months.
Amazon, for example, raves about the small businesses benefitting from its marketplace and its sales event Prime Day, even as it stands accused of leveraging nonpublic data to compete with those same small business sellers. Facebook, meanwhile, pushed the small business impact angle when Apple’s new privacy protections in iOS 14 allowed customers to opt out of being tracked — and therefore out of Facebook’s personalized ads empire.
In Apple’s case, it’s pointing to the fact that the number of small developers worldwide has grown by 40% since 2015. This group now makes up more than 90% of App Store developers. The study defines this group of “small” developers as those with fewer than 1 million downloads and less than $1 million in earnings across all their apps. It also excludes any developers that never saw more than 1,000 downloads in a year between 2015 and 2020, to ensure the data focuses on businesses, not hobbyists. (This is a slightly different definition than Apple uses for its Small Business Program, we should note.)
Among this group, more than 1 in 5 saw at least an increase in downloads of at least 25% annually since their first full year on the App Store. And 1 in 4 who sold digital goods and services saw an earnings increase of at least 25% annually.
The study also connected being on the App Store with growing a business’s revenue, noting that only 23% of large developers (those with more than $1 million in earnings in 2020) had already earned more than $1 million back in 2015. Indeed, 42% were active on the App Store in 2015 but hadn’t crossed the $1 million threshold, and another 35% were not even on the App Store — an indication their success has been far more recent.
The research additionally identified more than 75 businesses in the U.S. and Europe, where iOS was essential to their business, that went public or were acquired since 2011. Their valuation totaled nearly $500 billion.
Finally, the study examined how apps transact outside their home market, as around 40% of all downloads of apps from small developers came from outside their home countries and nearly 80% were operating in multiple storefronts.
Image Credits: Apple WWDC 2021 imagery
While the antitrust scrutiny may have pushed Apple into commissioning this type of App Store research last year, it’s interesting to see the company is now updating the data on an annual basis to give the industry a deeper view into the App Store compared with the general developer revenue figure it used to trot out at various events and occasions.
Like last year’s study, the updated research has been released in the days leading up to Apple’s Worldwide Developer Conference. It’s a time of the year when Apple aims to renew its bond with the developer community as it rolls out new software development kits (SDKs), application programming interfaces (API)s, software and other tools — enhancements it wants to remind developers are made possible, in part, because of its App Store fees.
Today, Apple notes it has more than 250,000 APIs included in 40 SDKs. At WWDC 2021, it will host hundreds of virtual sessions, 1-on-1 developer labs and highlight App Store favorites.
“Developers on the App Store prove every day that there is no more innovative, resilient or dynamic marketplace on earth than the app economy,” said Apple CEO Tim Cook, in a statement about the research. “The apps we’ve relied on through the pandemic have been life-changing in so many ways — from groceries delivered to our homes, to teaching tools for parents and educators, to an imaginative and ever-expanding universe of games and entertainment. The result isn’t just incredible apps for users: it’s jobs, it’s opportunity, and it’s untold innovation that will power global economies for many years to come,” he added.
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Spotify rolls out new personalized experiences and playlists, including a mid-year review and a blended mix with a friend
Spotify today is expanding its investment in personalization features with the launch of a dedicated in-app experience called Only You, which focuses on your favorite music and how you listen. The experience is similar to Spotify’s popular annual review, Spotify Wrapped, as it highlights the artists, songs, genres and other aspects of your music listening experience that are important to you, which can then be shared across social media, just as Wrapped is. The company is also today debuting Blend, a new way to create a personalized playlist with a friend.
The Only You hub will live alongside the existing Made for You hub on the Search page inside the Spotify app. In Made for You, you’ll find your other personalized playlists like Discover Weekly, Release Radar, Daily Mixes and others, like Your Time Capsule or Summer Rewind, for example, as well as the more recently added trio of playlist sets, Spotify Mixes.
From now through the end of the month, Only You will be a separate hub in the Spotify app, but it will ultimately be relocated to live inside the Made for You hub.
Image Credits: Spotify
The new Only You experience, meanwhile, will help you discover new trends beyond what you might see in your personalized playlists. This includes “Your Audio Birth Chart,” where the sun is the top artist you listened to over the last six months, rising is your most recent discovery and the moon is an artist you listen to that shows your emotional side; “Your Dream Dinner Party,” where you pick three favorite artists for a custom, frequently updated Spotify Mix featuring favorite songs and fresh picks; and “Your Artist Pairs,” which features unique pairings you’ve listened to recently, like those spanning genres.
It also will contain other personalized insights like the different time periods of music you’ve enjoyed, the music or podcasts you listen to at what time of day and your favorite music genres and podcast topics.
For example, your “Song Year” will show how you’ve traveled through different periods of time, based on the tracks you listened to throughout the year. The first year that will pop up here is the year you’ve streamed the most, while the second year that appears will represent the earlier release year that you’ve listened to. The third year is the most recent song year that’s been streamed.
To gather all this data, Only You looks at your Spotify in-app listening experience over the last six months (December 2020 – May 2021). Users must have streamed 30 tracks across five different artists over the past six months in order to be eligible for the new experience. Spotify says the data isn’t being used for ad targeting purposes. (And despite astrology’s connection to birth months and years, the “Your Audio Birth Chart” isn’t asking for users’ birth year to create this experience.)
Image Credits: Spotify
Another key part of the Only You campaign is the launch of Blend, currently in beta.
This feature will sit on the “Made for Two” shelf within the Only You hub, allowing you to invite any other Spotify user to create a playlist with you. Using similar mixing technology that powers Spotify’s Family Mix and Duo Mix in their respective plans, Blend lets you invite any other Spotify user (free user or paid subscriber) to merge their musical tastes with yours to create a curated playlist featuring songs you both like.
This playlist is updated daily and will grow with users over time as their listening habits change, Spotify says.
Because it works with free accounts, Blend could encourage more users to try Spotify so they can create a playlist with a significant other, best friend, family member or others, even if they’re not on a shared plan.
Image Credits: Spotify
Both the Only You experience and Blend build on technology Spotify had already developed to power other features, like Wrapped and various multi-user blended mixes, rather than creating something entirely new. But the bigger message Spotify wants to convey here is that it’s far ahead of competitors when it comes to personalization features. Even if rivals are duping its playlists, it wants to be the forerunner when it comes to personalized music.
Of course, that’s not always the case. The newer Spotify Mixes, for instance, were a lot like a feature Pandora had launched years prior, which created custom playlists across a number of attributes, including genre and mood. But where Spotify succeeds is its continual release of new personalization features, as it works to make its app customized to the end user. By doing so, the switching costs increase — that is, users will find it harder to jump to rival services due to how many custom playlists they may have on hand.
Spotify will begin heavily marketing the launch of Only You with a number of top artists by creating sets of stats for various fandoms, including those for Harry Styles, Selena Gomez, Lil Nas X, Doja Cat, Justin Bieber, SZA and others. The campaign will run through June 30.
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RevenueCat raises $40M Series B for its in-app subscription platform
RevenueCat, a startup offering a series of tools for developers of subscription-based apps, has raised $40 million in Series B funding, valuing its business at $300 million, post-money. Founded by developers who understood the difficulties in scaling a subscription app firsthand, RevenueCat’s software development kit (SDK) solution gives companies the tools they need to build a subscription business, including not just adding subscriptions themselves, but maintaining them over time even as the app stores implement changes. It also aids by sharing subscription data with other tools the business uses, like those for advertising, analytics or attribution.
The funding round was led by Y Combinator’s Continuity Fund and included participation from Index Ventures, SaaStr, Oakhouse, Adjacent and FundersClub, as well as Blinklist CTO Tobias Balling and Algolia CEO Nicolas Dessaigne. With the round, YC Continuity Partner Anu Hariharan is joining RevenueCat’s board, which today includes Index’s Mark Fiorentino in addition to the founders.
Explains RevenueCat CEO Jacob Eiting, the idea for the company came about after he and co-founder Miguel Carranza Guisado (CTO) struggled to figure out subscription infrastructure while working together at Elevate. After years of untangling a “subscription mess” in order to figure out answers to basic questions like subscriber retention and lifetime value, they realized there was potential in helping solve this problem for other developers.
Apple and Google, Eiting explains, aren’t always up to date with what companies actually need to build subscription businesses. “They’re kind of learning as they go. They just weren’t able to provide us the data we needed, and then also the infrastructure to do that is non-trivial.”
Image Credits: RevenueCat
When Eiting and Guisado sat down to work on RevenueCat in 2017, no one else was even building anything like this. But the demand for the startup’s tools and integrations soon resonated with developers who had faced similar challenges in the growing subsection app market.
Using the service, developers can access a real-time dashboard that display key metrics, like subscription revenue, churn, LTV (lifetime value), subscriber numbers, conversions and more. The data can then be shared through integrations with other tools and services, like Adjust, Amplitude, Apple Search Ads, AppsFlyer, Branch, Facebook Ads, Google Cloud Intercom, Mixpanel, Segment and several others.
After launching out of Y Combinator’s accelerator the following year, RevenueCat was soon live with 100 apps and had crossed $1 million in tracked revenue by the time it raised its $1.5 million seed round.
Today, RevenueCat has more than 6,000 apps live on its platform, with over $1 billion in tracked subscription revenue being managed by its tools. That’s double the number of apps that were using its service as of its $15 million Series A last August.
With the additional funding, the company will lower its pricing to put its tools in reach of more developers. Previously, it charged $120 per month for its charts and some of its integrations, or $499 per month for access to all integrations. This was affordable for larger companies, but could still be a difficult sell to the long tail of app developers where revenues ranged from $10K to $50K per month.
Now, RevenueCat will charge a small percentage of an app’s sales instead of a flat fee. Developers with up to $10,000 in monthly tracked revenue (MTR) can get started with the service for free and as their demands grow — like needing access to charts, support for web hooks, integrations and others — they can move up to either the Starter or Pro plans as $8/mo or $12/mo per $1,000 in MTR, respectively.
“I’m excited to give those tools to developers, especially on the small end, because it might be what they need to get out of that ‘less than $10K range,’ ” Eiting says. “Also, the beauty of freemium, or having a really generous free tier, is that it makes your tool the de facto — you remove as much friction as possible for providing software services and then, if you get your pricing right — which I think we have — it all kind of pays for itself,” he adds.
The company also plans to use the new funds to further invest in its business, expanding from App Store and Google Play support to include Amazon’s Appstore. It will also grow its team.
As part of its expected growth, RevenueCat recently hired a head of Product, Jens-Fabian Goetzmann, previously a PM at Microsoft and then product head at fitness app 8fit. Currently 30 people, in the year ahead, RevenueCat will grow to 60 people, hiring across design, product, engineering, sales and other roles.
“The world is moving toward subscriptions — and for companies, building out this model translates to weeks of developers’ time,” says YC Continuity’s Hariharan. “RevenueCat helps developers roll out subscriptions in minutes and creates a source of truth for customer data. With developers creating solutions to problems in the world, it’s important that they can find ways to monetize, grow, and support their most committed customers. RevenueCat is doing so by building subscriptions 2.0.”
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GasBuddy tops the App Store for the first time due to Colonial Pipeline attack
The GasBuddy mobile app, which typically helps consumers find the cheapest gas nearby, has now become the No. 1 app on the U.S. App Store for the first time ever, due to the fuel shortages in the U.S. that followed the cyberattack on the Colonial Pipeline. Americans, fearful that gas would become unavailable, began panic-buying in ways that haven’t been seen since the great toilet paper outage of 2020. As a result, thousands of gas stations ran out of fuel entirely. This dramatic situation has greatly benefitted the GasBuddy app, which includes a crowdsourced feature that helps users locate which local stations still have gas for sale.
As of Wednesday afternoon, GasBuddy says the effects of the Colonial Pipeline shutdown are being felt across 11 U.S. states, largely in the Southeast and Washington, D.C. North Carolina had the highest number of gas stations with fuel outages, with 65% of stations reportedly out of gas as of 2:48 p.m. ET on Wednesday. Kentucky has the lowest at only 2%. Because this data is self-reported by GasBuddy users, it may not represent the most current information, we should note.
Image Credits: GasBuddy app screenshot
During the week, consumers have been turning to GasBuddy to help them find where they can fill up. Yesterday, the app hit No. 1 in the “Travel” category on the App Store, while it steadily climbed its way up the App Store’s Top Overall charts.
This afternoon, GasBuddy became both the No.1 app in the non-games category as well as the highest-ranked app Overall across the U.S. App Store.
According to data from app store intelligence firm Apptopia, GasBuddy yesterday saw 15,203 new downloads — a 59% increase from its average daily downloads, which were 9,560 for the past 30 days. However, third-party data isn’t always accurate for sudden shots in rank — it catches up a few days after the fact.
Image Credits: Apptopia
Reached for comment, GasBuddy says its downloads were actually far higher than the third-party estimates. Across all platforms, including both iOS and Google Play, it saw 20x more downloads yesterday compared with an average day in 2021. The company told TechCrunch it counted 313,001 total downloads yesterday, compared with average daily downloads for the previous 30 days of 15,339.
Broken down by platform, GasBuddy says it saw 104,735 downloads on Android and 208,266 downloads on iOS on Tuesday, May 11, 2021.
Apptopia also noted that GasBuddy hadn’t been the No. 1 app on the App Store in all the time it’s been recording app store rankings, which goes back to January 1, 2015. However, it noted the app itself launched back in 2010, making it possible (though not likely) that the app had reached No. 1 at some point.
GasBuddy confirmed that’s not the case. Today is the first time it has ever topped the App Store, though it got close once before when it reached No. 2 behind a walkie-talkie app during Hurricane Irma in September 2017.
Image Credits: App Store screenshot on Wed., May 12, 2021
Consumers can continue to track statewide fuel outages here on GasBuddy’s website as well as where highest prices are being found. In the app, they can report whether gas stations have gas or diesel, as well as current prices.
The Colonial Pipeline, which runs 5,500 miles from the Gulf to the Northeast, shut down on Friday due to a ransomware attack from a criminal hacking network known as DarkSide, which is suspected to be based in Russia or Eastern Europe. The pipeline delivers about 45% of fuel used by the Eastern Seaboard. Reports of the shutdown sent Americans to stock up on gas, worsening the situation further. The U.S. Energy Secretary Jennifer Granholm said the Colonial Pipeline intends to restore operations by the end of the week.
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Apptopia raises $20M to expand its competitive intelligence business beyond mobile
Boston-based Apptopia, a company providing competitive intelligence in the mobile app ecosystem, has closed on $20 million in Series C funding aimed at fueling its expansion beyond the world of mobile apps. The new financing was led by ABS Capital Partners, and follows three consecutive years of 50% year-over-year growth for Apptopia’s business, which has been profitable since the beginning of last year, the company says.
Existing investors, including Blossom Street Ventures, also participated in the round. ABS Capital’s Mike Avon, a co-founder of Millennial Media, and Paul Mariani, are joining Apptopia’s board with this round.
The funding follows what Apptopia says has been increased demand from brands to better understand the digital aspects of their businesses.
Today, Apptopia’s customers include hundreds of corporations and financial institutions, including Google, Visa, Coca-Cola, Target, Zoom, NBC, Unity Technologies, Microsoft, Adobe, Glu, Andreessen Horowitz and Facebook.
In the past, Apptopia’s customers were examining digital engagement and interactions from a macro level, but now they’re looking to dive deeper into specific details, requiring more data. For example, a brand may have previously wanted to know how well a competitor’s promotion fared in terms of new users or app sessions. But now they want to know the answers to specific questions — like how many unique users participated, whether those users were existing customers, whether they returned after the promotion ended, and so on.
The majority of Apptopia’s business is now focused on delivering these sorts of answers to enterprise customers who subscribe to Apptopia’s data — and possibly, to the data from its competitors like Sensor Tower and App Annie, with the goal of blending data sets together for a more accurate understanding of the competitive landscape.
Apptopia’s own data, historically, was not always seen as being the most accurate, admits Apptopia CEO Jonathan Kay. But it has improved over the years.
Kay, previously Apptopia COO, is now taking over the top role from co-founder Eliran Sapir, who’s transitioning to chairman of the board as the company enters its next phase of growth.
Apptopia’s rivals like Sensor Tower and App Annie use mobile panels to gather app data, among other methods, Kay explains. These panels involve consumer-facing apps like VPN clients and ad blockers, which users would download not necessarily understanding that they were agreeing to having their app usage data collected. This led to some controversy as the app data industry’s open secret was exposed to consumers, and the companies tweaked their disclosures, as a result.
But the practice continues and has not impacted the companies’ growth. Sensor Tower, for example, raised $45 million last year, as demand for app data continued to grow. And all involved businesses are expanding with new products and services for their data-hungry customer bases.
Image Credits: Apptopia
Apptopia, meanwhile, decided not to grow its business on the back of mobile panels. (Though in its earlier days it did test and then scrap such a plan.)
It gains access to data from its app developer customers — and this data is already aggregated and anonymized from the developers’ Apple and Google Analytics accounts.
Initially, this method put Apptopia at a disadvantage. Rivals had more accurate data from about 2016 through 2018 because of their use of mobile panels, Kay says. But Apptopia made a strategic decision to not take this sort of risk — that is, build a business that Apple or Google could shut off at any time.
“Instead, what we did is we spent years investing into data science and algorithms,” notes Kay. “We figured out how to extract an equal or greater signal from the same data set that [competitors] had access to.”
Using what Kay describes as “huge, huge amounts of historical data,” Apptopia over time learned what sort of signals went into an app’s app store ranking. A lot of people still think an app’s rank is largely determined by downloads, but there are now a variety of signals that inform rank, Kay points out.
“Really, a rank is just an accumulation of analytical data points that Apple and Google give points for,” he explains. This includes things like number of sessions, how many users, how much time is spent in an app, and more. “Because we didn’t have these panels, we had to spend years figuring out how to do reverse engineering better than our competitors. And, eventually, we figured out how to get the same signal that they could get from the panel from rank. That’s what allowed us to have such a fast-growing, successful business over the past several years.”
As Apptopia was already profitable, it didn’t need to fundraise. But the company wanted to accelerate its expansion into new areas, including its planned expansion outside of mobile apps.
Today, consumers use “apps” on their computers, on their smartwatches and on their TVs, in addition to their phones and tablets. And businesses no longer want to know just what’s happening on mobile — they want the full picture of “app” usage.
“We figured out a way to do that that doesn’t rely on any of what our competitors have done in the past,” says Kay. “So, we will not be using any apps to spy on people,” he states.*
[*Sensor Tower, in response to Kay’s statements, said the following: “We have never collected any personally identifying information (PII) on individual users, nor have we received any of the anonymous usage and engagement metrics our panel provides without user consent.”]
Apptopia was not prepared to offer further details around its future product plans at this time. But Kay said they would not rule out partnerships or being acquisitive to accomplish its goals going forward.
The company also sees a broader future in making its app data more accessible. Last year, for instance, it partnered with Bloomberg to bring mobile data to investors via the Bloomberg App Portal on the Bloomberg Terminal. And it now works with Amazon’s AWS Data Exchange and Snowflake to make access to app data available in other channels, as well. Future partnerships of a similar nature could come into play as another means of differentiating Apptopia’s data from its rivals.
The company declined to offer its current revenue run rate or valuation, but notes that it tripled its valuation from its last fundraise at the end of 2019.
In addition to product expansions, the company plans to leverage the funds to grow its team of 55 by another 25 in 2021, including in engineering and analysts. And it will grow its management team, adding a CFO, CPO and CMO this year.
To date, Apptopia has raised $30 million in outside capital.
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Rent the Runway’s first iOS team launches Runway, an easier way to coordinate app releases
A team of mobile app engineers and designers from companies like Rent the Runway, ClassPass, Kickstarter and others, are now launching their own startup, Runway, to address the common pain points they experienced around the mobile app release cycle. With Runway, teams can connect their existing tools to keep track of the progress of an app’s release, automate many of the manual steps along the way and better facilitate communication among all those involved.
“Mobile app releases are exercises in herding cats, we often say. There’s a lot of moving pieces and a lot of fragmentation across tools,” explains Runway co-founder Gabriel Savit, who met his fellow co-founders — Isabel Barrera, David Filion, and Matt Varghese — when they all worked together as the first mobile app team at Rent the Runway.
“The result is a lot of overhead in terms of time spent and wasted, a lot of back and forth on Slack to make sure things are ready to ship,” he says.
Typically, interdisciplinary teams involving engineers, product, marketing, design, QA and more, will keep each other updated on the app’s progress using things like spreadsheets and other shared documents, in addition to Slack.
Meanwhile, the actual work taking place to prepare for the release is being managed with a variety of separate tools, like GitHub, JIRA, Trello, Bitrise, CircleCI and others.
Image Credits: Runway
Runway is designed to work as an integration layer across all the team’s tools. Using a simple OAuth authentication flow, the team connects whichever tools they use with Runway, then configure a few settings that allow Runway to understand their unique workflow — like what their branching strategy is, how they create release branches, how they tag releases and so on.
In other words, teams train Runway to understand how they operate — they don’t have to change their own processes or behavior to accommodate Runway.
Once set up, Runway reads the information from the various integration points, interprets it and takes action. Everyone on the team is able to log into Runway via its web interface and see exactly where they are in the release cycle and what still needs to be done.
“We’re forming this glue, this connective tissue between all of the moving pieces and the tools, and creating a true source of truth that everybody can refer to and sync or gather around. That really facilitates and improves the level of collaboration and getting people on the same page,” Savit says.
Image Credits: Runway
As the work continues, Runway helps to identify problems, like missing JIRA tags, for example. It then automatically backfills those tags. It can also help prevent other mistakes, like when the incorrect build is being selected for submission.
Another automation involves Slack communication. Because Runway understands who’s responsible for what, it can direct Slack notifications and updates to specific members of the team. This reduces the noise in the Slack channel and ensures that everyone knows what they’re meant to be working on.
Currently, Runway is focused on all the parts of the mobile app release cycle from kickoff to submission to the actual app store releases. On its near-term roadmap, it plans to expand its integrations to include connections to things like bug reporting and beta testing platforms. Longer term, the company wants to expand its workflow to include launching apps on other platforms, like desktop.
Image Credits: Runway
The startup is currently in pilot testing with a few early customers, including ClassPass, Kickstarter, Capsule and a few others. These customers, though not all yet paying clients, have already used the system in production for over 40 app release cycles.
The startup’s pricing will begin at $400 per app per month, which allows for unlimited release managers and unlimited apps, access to all integrations, and iOS and Android support, among other things. Custom pricing will be offered to those who want higher levels of customer support and consulting services.
The startup doesn’t have an exact ETA to when it will launch publicly as it’s working to onboard each customer and work closely with them to address their specific integration needs for now. Today, Runway supports integrations with the App Store, Google Play, GitHub, JIRA, Slack, Circle, fastlane, GitLab, Bitrise, Linear, Jenkins and others, but may add more integrations as customers require.
Runway’s team of four is mostly New York-based and is currently participating in Y Combinator’s Winter 2021 virtual program. The company hasn’t yet raised a seed round.
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