Leaked Investor Email From Tapulous Say Breakeven December, More Funding, New Products


Tapulous CEO Bart Decrem sent out an email to investors yesterday updating them on the status of the iPhone/Android focused company. It was forwarded to us, and we reprint it below.

The company makes the popular Tap Tap Revenge application as well as Tweetsville and others. Like competitor Social Gaming Network, everything they touch seems to turn to gold.

In the email Decrem says they have had 5 million unique installs of Tap Tap Revenge and claim it is the third most popular application for the iPhone, after Facebook and Pandora. He also says that they have 100,000 customers who’ve paid them for apps and they went from no revenue in September to break-even in December, an important milestone.

On December 31 the company closed an additional $1 million in funding, Decrem says, adding to the $1.8+ million they had previously raised. He also says Tap Tap Revenge II will release in early February.

The rest of the email is largely a description of the disruptive aspects of the iPhone/iPod touch platform. Decrem points out that their apps work on two extremely popular Apple devices. He also points out that games is the compelling application category: “six months into the App Store, there are three times more games available on the App Store than for the Nintendo DS, five times more than for Sony PlayStation Portable – and, says BusinessWeek , Apple is on track to sell as many game-capable handsets in twelve months as Nintendo, the current market leader, has sold in its most recently reported 18 months.”

The full email:

Dear Tapulous investor,

It’s been just about a year since we created our crazy little company, six months since the launch of the App Store, and we’re kicking off a new year, so what better time to check in with all of you and provide our thoughts on the year that just passed, and 2009?

One of our goals when we started the company was to be an early leader on a disruptive new platform. The platform has proven to be disruptive, and we are one of the leaders, arguably the leader, on the App Store:
#1 most popular game for iPhone & iPod touch for 2008
#3 most popular app overall for the US (since #2, the amazing Pandora app, is only available in the US, we have a strong feeling that Tap Tap Revenge is the #2 most popular app on the App Store worldwide, after only Facebook)
5 million unique installs on Tap Tap Revenge! (that doesn’t double-count when a user upgrades TTR)
100,000 paying customers
On December 31, we closed another financing, with most of our leading investors joining to invest another $1 million+ in the company. Not bad, in the midst of a huge economic downturn!
Tremendous buzz, including press coverage last month alone in the New York Times, BBC, Fortune, Techcrunch, Billboard, AFP, Reuters
A break-even month in December! Both advertising in Tap Tap Revenge and app sales contributed majorly, together with strong holiday sales of iPhone/iPod and iTunes gift cards

Biggest Learnings
One of the most exciting things about being one of the first on a disruptive new platform is that a new set of rules is being written, and the iPhone and iPod touch have offered no shortage of surprizing lessons!

1. It’s disruptive alright
100 million app downloads in 90 days. Holy cow. In late December, on one crazy day, we added 200,000 (!) new users to Tap Tap Revenge. When we started the company, our fundamental bet was that the iPhone was going to be different, and truly ring in the mobile decade. The first decade was about the PC revolution, the second decade was about the network, and the third decade, we believed, would be about mobile computing. It’s happening alright. The iPhone, with the new price points, is a huge hit, and the App Store has been a success beyond anyone’s dreams. When we started the company, people asked us why we didn’t focus on SMS and WAP, and some rolled their eyes when we told them our goal was to get to 1 million users in 18 months. Six months after launch, we’re at 5 million users. This technology is disruptive, and that means big new companies will be created.

2. Not just the iPhone –two hit platforms
Flying back to Southern California on Sunday after a vacation in Mexico, I looked around me on the plane and counted 6 (six!) iPhones and iPod touches in use just in the 12 seats right around me. Ever since the 3G iPhones launched, it’s started feeling like a few years back, when all of a sudden iPods were popping up everwhere. But it’s not just the iPhone that’s on fire, the iPod touch is just as important to our company. There were an awful lot of iPod touches in those stockings: we’ve heard rumors that some ad networks were seeing a million new iPod touches get activated right around Christmas day. The majority of our users are now using an iPod touch. Leave Silicon Valley (or just hang out with your younger cousins), and you’ll find a world of teenagers and consumers who weren’t ready to take the plunge on the iPhone (maybe they don’t have a phone yet, or they’re locked in multi-year contracts with their current carrier), but have now upgraded their iPods to a shiny new touch. In the process, they’ve upgraded from a great music player to a networked handheld music and gaming device.

With the iPhone and iPod touch, Apple is winning in two formerly very different spaces:
The smart phones market… really, the mobile phones market: Apple is already one of the largest phone makers in the world (#3 in revenues after only Nokia and Samsung), and hands-down the leader in smart phones and next-gen devices
The handheld gaming devices market. Who’d’ve thunk in July of 2007 that Apple would be rivaling Nintendo and Sony for leadership in the handheld games devices market? Well, six months into the App Store, there are three times more games available on the App Store than for the Nintendo DS, five times more than for Sony PlayStation Portable – and, says BusinessWeek , Apple is on track to sell as many game-capable handsets in twelve months as Nintendo, the current market leader, has sold in its most recently reported 18 months.
At Tapulous, we’re still getting used to that idea, and trying to shake our habits of assuming that all our users are above the legal drinking age, on an iPhone, and always online.

3. Games games games
Yes, the iPhone is great for social networking and location-based services, Facebook is the #1 app on the App Store, and you can build a nice business in any number of application categories. But if you want to get really big audiences, and tap into all those users with iPod touches, GAMES it’s where it’s at! Focus on those spare minutes people have as they wait for their friends, when they’re stuck at the airport, or between classes. 3 minutes (the length of a song) is not a bad chunk of attention to grab – as long as you can make sure users remember to come back for more later. So the “I’m looking for something while on the go with my networked, location-aware device” is still a valid use-case, and successful businesses will be built there, but the “I’m bored for a minute or two, and I may not be online” use-case is where the action is if you’re trying to build a really big audience.

4. The hybrid model works for us
We went from no revenues in September to a break-even month in December, so we wouldn’t dare predict what our mix of revenues will look like at the end of 2009, but so far, the hybrid model is working for us.

Our free game, Tap Tap Revenge, is bringing new users onto our platform at the rate of tens of thousands per day. We are able to monetize those users through non-intrusive ads and point those 5 million users to our premium games. Over 100,000 users have already upgraded to one of those premium games and we hope to entice many more in 2009. Ad-supported free apps vs paid apps? We’ll take both.

4. Breaking thru the noise: virality, buzz
With more than 10,000 apps on the App Store, it’s getting harder by the day to break through the clutter. Efforts to deploy Facebook-style viral strategies have largely failed because the platform isn’t inherently viral – only a fraction of your friends have an iPhone and Apple doesn’t create viral channels in the way Facebook and other social networks do. Things will start changing in 2009 as Facebook Connect becomes more popular, but good old fashioned word of mouth is back!

Fortunately, we’ve been able to break through the noise. It’s been a combination of getting there early (Tap Tap Revenge had a fanbase even before the App Store launched), offering a great product, listening to users, working the phones, and a healthy dose of good luck! The payoff: a good number of people who buy an iPhone or iPod touch have heard about Tap Tap Revenge, and go look for it on the App Store as one of their first apps to download, and we now have our own distribution channel in the form of millions of users on Tap Tap Revenge.

Up next: Tap Tap Revenge II, which is slated for launch in early February. TTR II will bring the innovations of Tap Tap Dance and some other great new features to the free game. We hope the launch will bring even more users into the game and deepen user engagement.

Thank you for being part of our family in 2008 – we look forward to working with you to make 2009 even more succesful!

Bart and Andrew

More TechCrunch

Zen Educate, an online marketplace that connects schools with teachers, has raised $37 million in a Series B round of funding. The raise comes amid a growing teacher shortage crisis…

Zen Educate raises $37M and acquires Aquinas Education as it tries to address the teacher shortage

“When I heard the released demo, I was shocked, angered and in disbelief that Mr. Altman would pursue a voice that sounded so eerily similar to mine.”

Scarlett Johansson says that OpenAI approached her to use her voice

A new self-driving truck — manufactured by Volvo and loaded with autonomous vehicle tech developed by Aurora Innovation — could be on public highways as early as this summer.  The…

Aurora and Volvo unveil self-driving truck designed for a driverless future

The European venture capital firm raised its fourth fund as fund as climate tech “comes of age.”

ETF Partners raises €284M for climate startups that will be effective quickly — not 20 years down the road

Copilot, Microsoft’s brand of generative AI, will soon be far more deeply integrated into the Windows 11 experience.

Microsoft wants to make Windows an AI operating system, launches Copilot+ PCs

Hello and welcome back to TechCrunch Space. For those who haven’t heard, the first crewed launch of Boeing’s Starliner capsule has been pushed back yet again to no earlier than…

TechCrunch Space: Star(side)liner

When I attended Automate in Chicago a few weeks back, multiple people thanked me for TechCrunch’s semi-regular robotics job report. It’s always edifying to get that feedback in person. While…

These 81 robotics companies are hiring

The top vehicle safety regulator in the U.S. has launched a formal probe into an April crash involving the all-electric VinFast VF8 SUV that claimed the lives of a family…

VinFast crash that killed family of four now under federal investigation

When putting a video portal in a public park in the middle of New York City, some inappropriate behavior will likely occur. The Portal, the vision of Lithuanian artist and…

NYC-Dublin real-time video portal reopens with some fixes to prevent inappropriate behavior

Longtime New York-based seed investor, Contour Venture Partners, is making progress on its latest flagship fund after lowering its target. The firm closed on $42 million, raised from 64 backers,…

Contour Venture Partners, an early investor in Datadog and Movable Ink, lowers the target for its fifth fund

Meta’s Oversight Board has now extended its scope to include the company’s newest platform, Instagram Threads, and has begun hearing cases from Threads.

Meta’s Oversight Board takes its first Threads case

The company says it’s refocusing and prioritizing fewer initiatives that will have the biggest impact on customers and add value to the business.

SeekOut, a recruiting startup last valued at $1.2 billion, lays off 30% of its workforce

The U.K.’s self-proclaimed “world-leading” regulations for self-driving cars are now official, after the Automated Vehicles (AV) Act received royal assent — the final rubber stamp any legislation must go through…

UK’s autonomous vehicle legislation becomes law, paving the way for first driverless cars by 2026

ChatGPT, OpenAI’s text-generating AI chatbot, has taken the world by storm. What started as a tool to hyper-charge productivity through writing essays and code with short text prompts has evolved…

ChatGPT: Everything you need to know about the AI-powered chatbot

SoLo Funds CEO Travis Holoway: “Regulators seem driven by press releases when they should be motivated by true consumer protection and empowering equitable solutions.”

Fintech lender SoLo Funds is being sued again by the government over its lending practices

Hard tech startups generate a lot of buzz, but there’s a growing cohort of companies building digital tools squarely focused on making hard tech development faster, more efficient and —…

Rollup wants to be the hardware engineer’s workhorse

TechCrunch Disrupt 2024 is not just about groundbreaking innovations, insightful panels, and visionary speakers — it’s also about listening to YOU, the audience, and what you feel is top of…

Disrupt Audience Choice vote closes Friday

Google says the new SDK would help Google expand on its core mission of connecting the right audience to the right content at the right time.

Google is launching a new Android feature to drive users back into their installed apps

Jolla has taken the official wraps off the first version of its personal server-based AI assistant in the making. The reborn startup is building a privacy-focused AI device — aka…

Jolla debuts privacy-focused AI hardware

The ChatGPT mobile app’s net revenue first jumped 22% on the day of the GPT-4o launch and continued to grow in the following days.

ChatGPT’s mobile app revenue saw its biggest spike yet following GPT-4o launch

Dating app maker Bumble has acquired Geneva, an online platform built around forming real-world groups and clubs. The company said that the deal is designed to help it expand its…

Bumble buys community building app Geneva to expand further into friendships

CyberArk — one of the army of larger security companies founded out of Israel — is acquiring Venafi, a specialist in machine identity, for $1.54 billion. 

CyberArk snaps up Venafi for $1.54B to ramp up in machine-to-machine security

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

2 days ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’