On the heels of its earlier $12 million fundraise, subscription administration platform RevenueCat has made its first acquisition — and it’s an uncommon one. As a substitute of buying an organization so as to add extra instruments to its platform, it’s shopping for an app providing subscriptions to “spicy” audiobooks, Dipsea.
No, this isn’t a large pivot for the favored platform utilized by greater than 30,000 app builders, together with Notion, VSCO, Ladder, Photoroom, Buffer, and others.
As a substitute, the novel thought right here is to convey a subscription-based app in-house to function a testing floor for RevenueCat’s new options and performance, the corporate says. Plus, it’s going to function a part of RevenueCat’s “build in public” philosophy.
Dipsea’s app works with authors and narrators (and ElevenLabs‘ AI voice expertise) to provide a wide range of romantic fictional tales with a give attention to the feminine gaze. At present, Dipsea has a reasonably sturdy enterprise, with 93,847 paying subscribers and an ARR of near $6 million. Final month, the app pulled in $505,920, for example.
Although the app is doing properly, as a venture-backed startup in at this time’s tightened regulatory atmosphere, it was having bother discovering an exit. As a longtime RevenueCat buyer, this introduced an uncommon alternative.
“I’ve known Faye [Keegan, CEO and co-founder of Dipsea] since nearly the beginning of RevenueCat,” says co-founder and CEO Jacob Eiting. “We’ve gotten to know each other more over the years, and just always felt like it’s hard to find people to understand RevenueCat’s customer problems as deeply as somebody who’s lived it.”
Eiting says that when the possibility to accumulate the Dipsea operation appeared, he thought it might show to be an opportunity to truly attempt to function a reside app, utilizing RevenueCat’s instruments, so the corporate might be sure that it was staying up-to-date on what the actual challenges are for subscriptions apps on at this time’s App Retailer.
“The App Store has completely turned over in the time since we started,” he says. “All the tactics have completely changed.”
At this time app builders face the standard problems with person acquisition, conversion, and retention, however the subscription economic system itself has grown at the very least 10 instances since RevenueCat started working, Eiting says. Competitors is fiercer, too. For each fashionable app class, there are at the very least seven different viable opponents. As well as, Apple’s launch of the person privateness measure ATT (App Monitoring Transparency) has affected builders’ person acquisition efforts.
“It’s definitely gotten harder and more sophisticated,” Eiting says. “And RevenueCat is part of that — democratizing that — taking techniques that different apps have figured out on their own and bringing that to everybody out of the box.”
Nonetheless, operating a subscription-based audiobooks app will likely be a brand new frontier for RevenueCat.
To assist with this, the acquisition is bringing aboard Keegan and her five-person workforce, who will proceed to replace the app and combine the brand new instruments that RevenueCat needs to check.
By proudly owning its personal app, RevenueCat can experiment with new methods earlier than attempting to persuade its personal paying prospects they’re well worth the danger. And, along with testing instruments, the app can function a demo to potential prospects who wish to go hands-on with RevenueCat’s dashboard earlier than they commit.
“Joining forces opens up new possibilities for Dipsea,” Keegan stated in a press release shared with TechCrunch. “We’ll tap into the wealth of subscription growth experience inside the company, and partner with them to keep building great features that help developers make more money while providing our Dipsea users with the content they love. I couldn’t be more thrilled to join the team.”
Dipsea was backed by traders together with Bedrock, Thrive Capital, Powerhouse Capital, Lemonade Capital, Riverside Ventures, Amboy Road Ventures, Jackalope Ventures, Bossanova Investimentos, and Area of interest Capital, in addition to different seed-stage VC corporations and angel traders. Up to now, it had raised $13.63 million, in keeping with PitchBook. In shopping for Dipsea, RevenueCat purchased out all of the traders on the app’s cap desk, whereas nonetheless permitting the app to proceed working its enterprise and fulfilling its mission.
Deal phrases weren’t disclosed, nevertheless it was an all-cash acquisition, we perceive, and a deal that’s been underway since this March. It’s unlikely RevenueCat blew the whole thing of its Sequence C on the app, so this was most likely not a giant win for Dipsea’s traders, from a monetary standpoint.
In time, RevenueCat hopes to show its success by rising Dipsea’s subscription enterprise, which it could actually then use for example to its present prospects.
“It means that we can tell you subscriber numbers and revenue numbers because, when the demo environment is live, you can just log in and check what it looks like,” notes RevenueCat VP of Advertising and marketing Rik Haandrikman.
“So if you check a year from now and it’s 50,000 subscribers, we f***** up, right?” he says with amusing. “Something went horribly wrong.”
Keegan will begin her new position at RevenueCat overseeing the Dipsea subsidiary in a few weeks, however the firm says it is going to be prepping the demo atmosphere forward of that.
