Summary:

The Berlin startup, which has been quietly developing its technology duirng a bootstrapped first couple of years, has gone into closed beta while revealing funding from VCs and SoundCloud and GameForge co-founders

Xyologic

Analytics startup Adeven suggested earlier this week that two-thirds of App Store was pretty much invisible to most users, leaving the apps unranked and hardly downloaded.

The company said, somewhat controversially, that Apple’s app search was lacking, leaving users largely dependent on Top 25 lists that tend to reflect the size of the developer’s marketing budget more than they do relevance to the users’ needs.

It’s not the first time someone has highlighted a problem here. Indeed, there are a few companies trying to target a perceived need for app discovery. Appsfire and Quixey spring to mind, as – of course – does Chomp, which Apple bought earlier this year.

But another service that has been gearing up for around two years is Berlin-based Xyologic, whose Xyo service went into closed beta on Thursday (you can request an invite here).

Xyologic’s big selling point is the way its technology classifies apps into relatively specific genres – a strategy that it says makes it possible to understand even vaguely-expressed search queries. In a recent blog post, the firm said its work so far has shown:

  • only five percent of app search queries are for specific usage functions.
  • a similar amount are for specific app names.
  • the vast majority are category searches.

So, using its proprietary ‘natural app category’ tech, the company has defined more than 700 app genres and more than 100 game genres. It also claims to “put some of the best and often undiscovered apps on top of the search result rankings”, and says it can make it easier for users to evaluate the quality of an app.

Right now, the Xyo beta covers Android, although iOS is coming soon. Xyologic also announced a funding round (amount undisclosed), from investors including Signia Venture Partners, Gameforge founder Klaas Kersting and Soundcloud co-founder Eric Wahlforss. Xyologic CEO Matthäus Krzykowski told me:

“This is the first app search that aims at the mainstream user. Our approach is unique in this sense that, in the last two years, we have gathered information on how users search for apps, what queries they type, how they behave.”

So how bad is the app discovery problem, really? According to Krzykowski, 0.1 percent of apps get 50 percent of the downloads.

“The situation is pretty similar on all platforms, albeit slightly better on iOS,” he added.

Sure, Krzykowski has a vested interest in pointing this out. But, at the same time, this kind of information is what’s kept the company afloat during its initial, pre-launch two years of operations. Until this new investment round, Xyologic has bootstrapped and supported itself by selling data and reports.

“We also tested older versions of our app search in partnerships with third parties where we split up the advertising revenue. We used this money to fund our innovation in app search,” Krzykowski noted, adding that, in terms of future revenues, “you will see innovative approaches to app marketing”.

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