Appia runs online marketplaces that help get mobiles apps in front of consumers while also helping app developers get discovered. The proliferation of apps means Appia is growing like gangbusters.
But the Durham company’s growth prospects have less to do with that new smartphone you’ve bought or the fact that your grandparents are upgrading from “dumb” phones to smart ones. It’s that someone in an emerging market halfway around the world is getting a new phone, a smart one. And soon hundreds of millions of others in places like India, China and Africa will get one too.
There are an estimated 6 billion mobile phones in the world, said Appia CEO Jud Bowman. But just 1.5 billion of them are smartphones. The global consumer upgrade is coming soon.
“The thing that we do more on a smartphone, other than talking, is apps,” Bowman told WRAL TechWire. “(Appia is) benefiting from this rising tide of apps growth and smartphone adoption.”
Appia is preparing for that growth by building out its management team. The company is announcing today the appointment of mobile advertising veteran Jamie Fellows as chief product officer. Fellows’ experience includes working as the director of product management at Advertising.com, a startup that was acquired by AOL for $435 million. At AOL, Fellows worked as vice president of product management, where his responsibilities encompassed AOL’s advertising. Most recently Fellows worked at mobile advertising firm Millennial Media (NYSE:MM). He was senior vice president of product for the Maryland company, which generated $177.6 million in 2012 revenue. Fellows says he came to Appia in part because he feels a pull toward early stage companies.
“I really enjoy high-growth startups so this is the space,” he said. “Seeing Advertising.com go through it, seeing Millennial go through it, I think I can have a considerable impact on the growth of this company.”
Parallels to Motricity
Appia’s development runs parallel to Bowman’s previous company, Motricity. In its early days, Motricity’s money came from ringtones, which users paid $1 or $2 to download. In Appia’s early days, Bowman thought that the company would make money in a similar way: charging for apps that people downloaded to their phones. But there’s one problem with that model. While there’s countless apps being developed for mobile devices, those apps are increasingly free.
Appia runs marketplaces around the world that bring visibility to apps. As Bowman puts it, people “pay us to help get their app discovered.” Rather than getting paid per click, Appia gets paid each time someone on the marketplace installs an app. The marketplaces also feature advertising, in some cases ads from developers. Tablets represent an additional growth opportunity. While the sheer number of tablets in use in the world is small compared to the number of smartphones, Fellows says advertisers will pay more to get discovered on a tablet versus a smartphone.
Privately-held Appia doesn’t disclose specific financial figures. But Bowman will say that as the first half of 2013 closes, Appia already has more than doubled what the company generated in revenue for all of 2012. Venture capital-backed Appia can also draw from $5 million in debt funding that the company secured in April.
Overseeing Appia’s finances is new CFO Tim Oakley, who joined Appia in February. Oakley was the former CFO of e-mail marketing firm iContact before it was acquired by Vocus last year for $169 million. Appia has more than a dozen openings and the company is also currently on the hunt for a chief technology officer, which Bowman expects to name in the third quarter.
Bowman points out another key difference between Appia and Motricity. Motricity’s business was almost exclusively focused on North America. But Appia’s 63 employees include advertising and business development staff located throughout the world. In India, where Appia operates app marketplaces for two of that country’s largest phone companies, Bowman says a $40 Android tablet recently launched and web access costs only $1.75 a month.
“I think that’s a game changer,” Bowman said. “Because the point is below $100, we’re going to see this global adoption.”
Appia’s own marketplace will be the world.