StartApp reaches 150M downloads, brings 10x more revenue to developers

StartApp, an Israeli startup that promises to bring much-needed revenue to frustrated app developers, today announced it has been downloaded 150 million times.

The highly profitable, fast-growth company is a darling of the Israeli tech scene — this, I noticed, during a trip to Israel this summer where I was introduced to StartApp’s CEO, Gil Dudkiewicz, an entrepreneur-in-residence at local venture capital firm, The Cedar Fund.

Dudkiewicz told me then that the pain-point StartApp is trying to address is simple. Developers struggle to generate revenue from their applications. Even some of the most downloaded apps do not have a strong and sustainable business model, which acts as a deterrent to young developers building the next generation of apps.

As it stands, developers only have two options to make money: They can charge for an application or set up in-app ads.

“The latter option provides an inferior user experience, as most users will only click on the ads by mistake,” the company’s chief executive told VentureBeat.

StartApp offers a platform that allows Android app developers to monetize through downloads, an attractive model for the most popular apps on the marketplace. As VentureBeat reported in March, StartApp will pay developers $50 for every 1,000 downloads.

The company’s critics have been quick to point out the catch. Isn’t there always a catch? Users who download a StartApp-integrated app will notice a curious search icon appear on their home screen. This is how StartApp makes its money. Whenever a user searches the Web via this search portal, StartApp generates revenue, and developers can take a cut.

They will have been notified and have the right to delete it immediately — but will this taint the user experience?

With the sheer volume of downloads and rapidly expanding customer base (StartApp now integrates with 3,500 Android apps), the solution seems to be working for now. To continue to thrive, the company will need to find an alternative to the search box, particularly before expanding to iOs. Apple would not welcome the intrusion on its slick user interface.

StartApp faces strong competition from global mobile ad networks, such as Admob and InMobi. The founders remain optimistic that the pay-per-download model will be the preferred option. “We have introduced a new take on app monetization, one that enables a clean app for a better user experience,” Dudkiewicz told me in an email interview.

StartApp brings us this news a few short months after its first funding round of $4 million, led by the Cedar Fund and Ascent Venture Partners. Since March, adoption rates have skyrocketed; the app was downloaded a further 100 million times.