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Fifteen, ten or even five years ago, in an ever-emerging mobile app development market, not many app publishers or marketers would have imagined that in just a few years billions of dollars would be made from subscriptions instead of ads that smash well thought through user experiences in pieces. It may also have been hard to predict that millions of people worldwide would gladly sign up for a fair price of a moderate monthly fee to have a great content, service or anything that an app developer want to offer to the world.
Apple App store has been very helpful for app publishers in developing subscription based businesses where at some point iPhone owners found it hard to find how to cancel their existing subscription. Moreover, many even didn't know about existence of the fact they are paying to some developer for some app until carefully exploring their bank card statements (which many don't do). Anyway, that is history, and now iPhone users see their under settings much easier to find option of managing their Subscriptions.
At this point average iPhone owner from developed country pays over 100$ per month on combination of subscriptions while average Android phone user is willing to spend 4$ a month for an app subscription if the service and value is there.
The borrower - an Estonian registered Special Purpose Vehicle structured as OU (limited liability company), incorporated for advertising and research purposes is looking to borrow €200,000 over 9 months for operational needs as described throughout this page.
Loan purpose: App discovery, buyout, redevelopment, publishing and intensive marketing with purpose of gaining recurring subscription based revenue.
How funds will be used
- development of special App Buyout landing page plus marketing (<5%)
- app buyout team hiring and management (10%)
- covering expenses on special app analytics software (10%)
- budget for Apps buyout (40%)
- budget on redevelopment and feature adding (>15%)
- marketing budget (>20%)
Development of special App Buyout landing page plus marketing
Simple yet required task. There are over 3M apps on Google Play Store and over 2M apps on App Store totaling 5M. These apps are published by over 1 million app publishers. And while we've heard of some success stories, there are a lot of publishers that haven't been able to get the potential out of their creating for whatever reason it could be. Some lack finances, some lack knowledge, some commitment. Some have the capability of technical development but lack important parts in apps that drive revenue numbers up. Stories vary. This task will be targeted at creating simple to use landing page where app developers will be driven from their email boxes (reminding that there are around 1 million publishers to reach out to with inquiry) and if interested they will have option to submit request for app buyout offer. This process will be semi-automated, as app potential has to discovered by a person (for good AI tool it would not be cost effective at the moment, but....).
The main task - find a supply and provide offers.
App buyout team hiring and management
A team of two will be set to work daily on publisher reach out, communication, negotiations and further transfer process management.
Covering expenses on special app analytics software
This task will be aimed at two business parts. For successful app buyout process we need data. And based on data such as similar app performances, potential discovering, trends analysis it is possible to find the most suitable apps that can be a real revenue generators with some investment into feature redevelopment.
Budget for Apps buyout
Prices may vary from 5 to 50 thousand, based on the potential and potential ROI of the app. Primarily, lower priced app publishers will be targeted. Thing is, to create an app from scratch it requires at least 2 months, and usually reaches 6-8 months as you cannot always foresee all features and user flow and many adaptions are made during the process. Moreover, developing app from scratch will cost starting from 45K EUR in more economically developed country and from 10K EUR in lower Asia countries though communication issues may arise.
Acquiring ready built app that requires some improvements for better monetization is much less time consuming and cost effective process with the major part of it being ability to discover and negotiate.
Budget on redevelopment and feature adding
Why apps have not succeeded? Before buying this simple yet hard question will be answered and plan of improvement will be set up. This will require work from a team of senior app developers as apps will vary in many things and integration of must have tools and features will have to be done within shortest possible time and without any hustle.
When App(s) is purchased, transferred, redeveloped and ready to bring in sales, user acquisition campaigns will have to take place. Before launching, during all previous processes this part will be in strategic stage building a flow and campaigns to launch immediately upon completion of App tasks.
Risks and Loan Repayment
Wisefund as investor representative will hold a collateral on all borrowing company shares and will pledge all asset monetary value in the amount exceeding the loan amount. During the first stages of the project the collateral will be lower than the loan. This is why the high interest rate is applied as a meaningful reward to investors. With growing value of assets (acquired apps) the collateral LTV will be more attractive keeping the same interest rate for first stage investors.
Borrower will provide quarterly reports to all investors on project development, expenses and revenue.
Major risk persists to get stuck with app feature updates and redevelopment as coding process while predictable can cause schedule movements at any point.
Risk of not getting returns from subscription higher than actual expenses on user acquisition is not considered a significant risk as global strategies of this business model are developed within the company ready to be applied to selected apps with small adaptions required. Overall maximum conversion rate gaining strategy is fully developed. and proven. 1 year ROI for the business is 35%+ with recurring revenue looking as a long term investment being main part of the business building purpose.
For investors willing to invest significantly into project (starting from 5 thousand euro), this project offers special terms of multi-year revenue sharing. For those interested, please reach out to firstname.lastname@example.org for more information (like terms, agreement example, securing the claim of additional interest, as well as deeper look in the proposed business, data, targeted apps, development strategies etc.