New York start-up Appboy, which helps mobile apps keep their customers, has raised $7.6 million in Series A funding.
The round was led by Icon Venture Partners, with participation from IDG Ventures and Mike Lazerow, CEO of Buddy Media.
Existing investors Blumberg Capital, T5 Capital, Bullpen Capital and Accelerator Ventures also took part.
Co-founders Mark Ghermezian, Bill Magnuson and Jon Hyman say they’ll use the funds to build Appboy’s sales and marketing team, expand product offerings and build up its so-called “mobile relationship management” (MRM) platform.
With more than one million apps to choose from, Appboy said the average app business struggles with high user acquisition costs and low retention rates – 60 per cent are unable to break even.
In response to growing competition and the fickle nature of mobile consumers, app marketers – insists the start-up – must radically shift their approach from buying ads and driving installs to better managing their mobile audience.
“The average acquisition cost today for an app user is about $1.90 per person,” CEO Mark Ghermezian told Forbes. “If you want to just keep acquiring users, you can do that, but it doesn’t scale.”
The MRM platform from Appboy offers as an alternative. It gives app makers statistics on who is using the app and who might be at risk of uninstalling soon.
Login information, sharing, and other usage can predict who has lost interest or isn’t taking advantage of options available.
Appboy has seen 400 per cent growth in the last nine months and now counts more than 1,000 clients, including Text+, Urban Outfitters, GSN, SnipSnap, Bloomberg, and magazines Shape and PopSci.