Today Paris-based AppGratis, an app discovery and daily deal platform, announced a $13.5 million series A funding round led by Iris Capital with participation from Orange Publicis Fund. To date, the company has seven million users in more than 30 countries, and will be using the funding to add to its international team of employees, currently from 12 countries, and improve their back-end technology as the platform continues to expand globally.
Simon Dawlat founded the company in 2011, and it started as a weekly email newsletter featuring his top app picks and evolved into AppGratis, a startup which now has more than $1 million in monthly revenues, and two million unique daily visitors. “We started as app developers ourselves…very quickly we realized that the big pain point rising in the market was going to be distribution,” said Dawlat. “[AppGratis] is a way for people to simply discover new apps everyday. We have one specific offering, which is we work with app developers to bring their paid app free to the market, and that is something that has made us pretty successful with the app shopper community.”
Already averaging more than 300,000 installs each day for its own app, the company’s efforts led to more than 100 million installs of featured apps in 2012. According to Dawlat, nearly half of the company’s 40 person staff is dedicated entirely to curating and finding the most interesting and entertaining apps. The company has also built an internal framework and backend technology to cut through the hundreds of thousands of paid apps on the Apple App Store, assessing variables like the reputation and history of the developer and whether the app has climbed up in rankings, among several others. Once 5-10 apps have been narrowed down, the company’s team of curators go to work and pick out the ‘gems’ as Dawlat put it, and make them available for free for 24 hours. Another thing the team prides itself on is the copy, with Dawlat referring to Groupon’s ability to both entertain and engage users to buy in to the deal.
The company aims to serve two distinct markets, first acting as an advertising and distribution channel for well-known brands like Nike and secondly as a way for indie developers to get their app out there. Its revenue models also differ depending on which customer segment’s app gets featured, acting as advertising portal for bigger brands, and engaging in revenue sharing with smaller app publishers through in-app purchases after the download.
Given that users’ appetite for paid apps is quite low, with only 11 percent of the 45 billion apps downloaded in 2012 costing them anything, AppGratis’s model has validation to it, however, app discovery and daily promotion is a crowded space. Startups have tried virtually everything, from Hubbl’s visual and hashtag driven network, to other platforms like AppHero, Discovr, and youAppi. Not to mention startups pursuing the same daily deal route like App-O-Day and FAAD.
“You have people who’ve gone to replicating the App Store, you have people who have super complex search engine for apps,” said Dawlat. “Our focus is the absolute opposite. We’re going to the simplest product you can find, one free app a day…by solving the simple need of, ‘what am I going to download today?'”
Overtime, the company is building technology that will serve personalized deals for apps, based on users’ past interactions. Given the massive amount of apps available, AppGratis may just prove that when it comes to app discovery, users just want something served to them, but it will have to fend off competition, both from the App Store itself through featured apps, and from competitors like App-O-Day.