London based in-app ad platform Tapdaq, which provides indie and mid-sized app developers with an option for driving app installs by selective cross-promotion of other devs’ apps, has announced a $6.5 million Series A round, with investment coming from BGF Ventures, Balderton Capital, Spring Partners and Open Ocean Capital.
The startup focuses on fixing an ever-growing problem for developers: app discovery, with some 3.1 million apps hosted on Google Play and Apple’s App Store as of July 2015.
As Tapdaq’s CEO, Ted Nash, puts it: “For an app to succeed today, developers need to be either very wealthy or incredibly lucky.” The idea for the platform came to Nash, an app developer himself, after he found it progressively harder for his apps to gain traction.
Tapdaq’s trick is to boost discovery via a cross-promotional mobile ad-exchange model. So instead of developers directly needing to spend cash to acquire new users, Tapdaq users earn virtual currency (‘daq’) trade ad installs with each other, via the platform. This exchange is balanced to ensure a developer sends an equal number of ads as they receive. (NB: A prior mechanism involving earning virtual currency to redeem for ads was discontinued after community feedback.)
This community approach to in-app marketing presumably benefits from increased relevance as developers get to choose which apps to cross-promote to their users by browsing Tapdaq’s marketplace. Developers can also customize the ads to better fit with their apps. The platform is integrated into apps via a free SDK.
“App marketing technology provider Fiksu reported recently that the costs associated with retaining one ‘loyal user’ hit a massive $4.04 in August 2015, representing a 36% increase month over month and 117% percent rise year over year. So as a developer, the only way to succeed on the App Store is by either being lucky, or rich,” Nash tells TechCrunch.
“We want to change this by offering a solution for mobile app developers of any size looking to promote their apps by trading installs on the platform to generate more awareness and revenue for the publisher. We like to think we have normalised the process of building a successful business on any mobile platform, be it Apple, Google, or whatever comes next.”
Tapdaq is not currently disclosing user numbers, or any install metrics, but Nash says it sees “well over 100 million unique sessions per month”.
Given its SDK is free, and developers aren’t paying for advertising directly (just trading like-for-like ad installs), that begs the question what’s Tapdaq’s business model?
“It’s our aim to become the default inventory management platform for developers, and once we have achieved that we will start to monetise the inventory on the platform,” is all Nash will say on that one.
He says the new funding will be used to “continue building out the platform”, as well as tweaking how it’s serving its developer community’s needs.
“The developers who use our platform also help us build it (actually contribute code), so our entire product is evolving based on developer needs as opposed to us creating a separate vision which we then would have to selling to developers,” he adds.