Apptopia, the marketplace where developers can sell their mobile apps, is days out from closing a $1 million seed round of financing, with Mark Cuban leading the investment. Cuban went in for $500,000 himself, and Apptopia’s initial investor, Expansion VC, contributed $400,000. The rest of the round was filled out by angel investors from N.Y., Boston and San Francisco. Apptopia founder Jonathan Kay says the round was oversubscribed. “It’s funny how when Cuban invests, everyone else wants to follow,” he remarked.
The close of the round brings the startup’s total raise to date to $1.4 million.
We first looked at the business Apptopia was building back in January, just prior to its public launch. The company only had a couple of hundred thousand in seed funding then, including $110,000 from Expansion VC. But the rest was bootstrapped by founders Jonathan Kay and Eli Sapir.
The service itself allows developers to sell their mobile apps and other bits of source code, and manages the entire selling process from beginning to end. It connects the buyer and seller together and works with the appropriate app store to make the transfer. Apptopia then takes 10% of the transaction price, of which it keeps about 8% (with the other 2% going to credit card fees). At the time, Kay said that he expected app sales to range from $6,000 to $15,000.
Today, he says that apps can be sold for anywhere from $500 to $150,000, but the highest it has sold to date was for $13,000. However, a deal is in the works for a music app that’s for $25,000. The average sale is now $4,500, but the company is expecting that average to climb to around $6,000-$7,000 in about three more months. Kay also tells us that sales have doubled month-over-month for the past three months. The first month brought in $25,000, the second $50,000, and they’re now on track to break $100,000 this month.
The new funding, in part, will go to finance the company’s forthcoming monetization strategy, which first requires some R&D investment. “We have an idea how to make a big splash in one area of this, and so we’re going to head hunt a few big guys in mobile and build out an additional value-add of Apptopia,” says Kay. “Today, if you want to make money on your app, you can sell it through Apptopia,” he says. The second monetization strategy will launch in a couple of months, and is in testing now, but he could not go into detail. “I can say it will be more focused on the user side of an app, versus the technology. How do you inspire usage? Activity? Etc.” He also noted that integration with Flurry is a week or two out.
As noted above, the R&D efforts require hiring, and that’s also what part of the funding will be used for. The company will have four open jobs by the end of the day today, or the first thing tomorrow, for UI/UX, Director of Product and two developer sales/evangelists.