When Apptopia debuted in April, it bet that there would be enough app developers looking to unload their entire app to a group of eager sellers. Now, three months in, Cambridge, MA.-based Apptopia is doing solid business. And that has attracted the attention of investors including Mark Cuban, who is putting in half of Apptopia’s $1 million seed round.
The seed funding, which also comes from a number of angel and VC investors, will help Apptopia add four more employees to its team of eight as it looks to scale up to handle more buyers. Apptopia faces the pleasant problem of having more buyers than sellers at this point. Jonathan Kay, the co-founder told me that he has about eight buyers that have more than $150,000 to spend on applications. Apptopia is scrambling to find apps to fit these buyers’ needs.
Apptopia, which has more than 300 apps, operates like an auction, allowing app developers to list their apps for sale. Buyers with the winning bid get the app’s source code, IP, customer list, data and revenue as well as a non-compete agreement from the seller. Kay said Apptopia has sold 50 apps to date at an average of about $4,000 per app. The market has steadily been growing and did more than $100,000 in sales in its third month, double the previous month. That reflects both more sales and a higher price point for apps. Kay said the site just booked a $25,000 sale of an app, the largest to date.
“I have some big buyers, who have weirdly large budgets and we’re getting inbound interest from developers [that are] doing well but they just want to get out. People are saying they’re making thousands of dollars but they’d like to cash out for a years worth of revenue right now.”
Apptopia raised $400,000 prior to its launch from Expansion VC. The company plans to not increase headcount in Boston and San Francisco, but also pursue a new related project.
Kay said the buyers range from app development shops that want to round out their portfolio to companies looking for an easy way to get into the mobile app market. He expects more apps to go up for sale as developers learn about Apptopia as a lucrative exit option.