Apps: the three conditions to attract an investor from Silicon Valley

by bold-lichterman

Mobile applications raise questions among investors in Silicon Valley. Should we still invest or not? Some studies point out that users no longer download a lot of apps. Thus, 51% of Americans with a smartphone install no application per month, according to a Comscore study (second quarter 2017).

Apps the three conditions to attract an investor from Silicon
Credit: Comscore / TechCrunch

Other analyzes go in the opposite direction. AppAnnie, a specialist in audience measurement for mobile apps, estimates that the economy linked to mobile applications should generate 6.3 billion dollars in 2021. The number of users will continue to climb to reach 6.3 billion in 2021 compared to 1.6 billion in 2016.

The market is dominated by giants such as Facebook or Google (8 of the 10 most used applications come from these two firms), but some applications still manage to do well today. A few weeks ago, the application musical Musical.ly was sold to Chinese Bytedance for between $ 800 million and $ 1 billion and Facebook has bought the tbh app, intended for teens.

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Credit: Comscore / TechCrunch

But what do we think, on the investor side? Jeremy Liew, who has among his feats of arms an investment in Snapchat since 2012, believes that mobile applications still have a bright future ahead of them. This is why, in a recent post Medium, he met the performance conditions for an app likely to arouse his investor interest – and by extension his colleagues in Silicon Valley – in the following formula:

If your app has hit at least 10k DAU with strong engagement (25% + DAU / MAU, at least 3 sessions / day), retention (30% + d30 retention – that’s d30, not month 1) and growth (30% + month on month growth), I’d like to hear from you!

Let’s resume:

  • 10,000 DAU (daily active users) with a strong commitment

Lightspeed Venture Partners’ partner mainly targets apps with at least 10,000 active users per day, an audience to which Liew adds an engagement criterion: these daily users must represent at least 25% of monthly users, with 3 sessions / day.

  • 30% retention rate

Liew wants to invest in apps that keep their interest after more than a month. Jeremy Liew focuses on apps with a retention rate of at least 30%. This means that a third of people who opened the app in the last 30 days are using it again.

The American investor is focusing on applications that register monthly user growth of 30%.