Earlier on Wednesday, August 22nd, Braavo, a start-up that finances mobile app developers, made an announcement stating that it has raised $6 million in Series A funding.
Although it is quite low in comparison to last year’s announcement, in which Braavo raised $70 million.
However that was a debt financing series A funding, used to loan money to developers. And this latest Series A funding round is equity financing, used to fund Braavo ’s own growth and operations.
Braavo was founded back in 2015, and according to Cofounder Mark Loranger, it was in response to the “new dynamics” of mobile app businesses.
The start-up has worked with many developers like Pixite, Fanatee, and Verv, etc.
According to Loranger, “The data is available to present multiple ways of providing financing to companies that otherwise might have to raise more [venture funding] and dilute themselves.”
According to reports, Braavo targets Google Play data and Apple App Store for its very first financing product, particularly for the amount of money already earned by an app but not yet paid out. Braavo can then offer an advance on some of that revenue.
In Loranger’s words, Braavo’s newer product is “more data-driven” and “more exciting.” It analyses user engagement, user acquisition, and revenue, projecting how to generate more revenue if a developer had more money for user acquisition, after that it can then provide debt financing for that growth.
Loranger then said, “Braavo gets paid back a fixed percentage of future earnings hence, our incentives are aligned with the developers”
Further saying, “We would only make our money back as and when they(developers) earn more revenue in the future.”
“So, if app revenue does not grow as predicted, it just means Braavo gets paid back slowly,” said Loranger.
He then added, “We have never, ever lost even a dime.”
Along with this Series A funding round, Braavo also announced that it would be launching a new analytics product that will allow businesses to track key metrics, for instance, the lifetime value of their customers.
According to Loranger, “Our services will be available for free to anyone who has a “revenue-generating mobile app business.”
“Instead of charging for the product directly, our goal is to create more success for mobile app businesses which would increase their chances of qualifying for funding,” Loranger further added.
The new round led by e.ventures and assisted by SWS Venture Capital (founded by Green Dot CEO Steve Streit) and Shipt CEO Bill Smith brings Braavo’s total equity financing to almost $8 million.
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