RevenueCat, the leading subscription management platform for apps that monetize through in-app purchases, has secured $12 million in a Series C funding round led by Adjacent. The funding comes as RevenueCat expands its services to the web, following the launch of RevenueCat Billing, a product that enables web app developers to integrate subscription purchases into any website. This move comes at a crucial time, as the European Union’s Digital Markets Act (DMA) regulation pressures Apple to open up the iPhone and the App Store to new competition.
The launch of RevenueCat Billing coincides with the implementation of the DMA, which has pushed Apple to allow the use of Progressive Web Apps (PWAs) on iPhones in the EU. Apple initially blocked iPhone web apps, fearing that developers would abandon the App Store. However, under regulatory pressure, Apple reversed its decision. The changes enforced by the DMA and Apple’s refusal to reduce its 15%-30% commission rate have led more developers to explore web monetization options.
RevenueCat CEO Jacob Eiting explained that the new web billing product is designed to cater to progressive web apps and customers who want to process payments outside of the App Store. The product aligns with the new DMA rules, making it a significant expansion for RevenueCat. The company decided to pursue this direction due to the high demand from developers. Even if developers are already processing payments through platforms like Stripe, RevenueCat offers them a unified dashboard where they can manage and analyze their subscription app data, regardless of the payment source.
While competing platforms like Stripe already offer similar functionality, the key advantage of RevenueCat Billing is its focus on consumer subscription apps. Developers can process payments through other platforms, such as Stripe, while still benefitting from RevenueCat’s comprehensive data insights and analysis. This simplifies the management of subscription apps and enables developers to monitor their overall monetization performance.
Apple has traditionally prohibited app developers from directing customers to the web from within their iOS apps. However, developers have been allowed to steer customers to the web from other channels, such as their websites or emails. The DMA rules will likely permit developers to direct customers to the web from within their mobile apps as well.
RevenueCat Billing, essentially a web software development kit (SDK), empowers developers to accept subscription payments from any website. The product complements RevenueCat’s other recent releases, including Paywall, Targeting, and Experiments, which are all designed to help developers drive revenue growth. With over 30,000 apps relying on RevenueCat to power their subscriptions and handling over $2 billion in subscriptions annually, the company has established a strong presence in the market.
The $12 million Series C funding round, led by Adjacent, also included participation from investors such as Y Combinator, Index Ventures, Volo Ventures, and SaaStr Fund. This brings RevenueCat’s total raised funds to over $68 million, with the previous round raising $56 million. The new funding will not only support the development of new products but also facilitate RevenueCat’s expansion into new markets, including Japan and South Korea.
CTO and co-founder Miguel Carranza stated that RevenueCat’s main competitor is the practice of building monetization technology in-house. While many businesses in the United States have embraced the benefits of using RevenueCat, in other regions, it is still common for businesses to dedicate significant resources to building in-house solutions that offer no differentiation or value to end-users. To address this, RevenueCat plans to invest in these regions by expanding language and currency support, building stronger relationships with local technology partners and agencies, and hiring locally.
Although RevenueCat has not yet achieved profitability, CEO Jacob Eiting remains confident that profitability is on the horizon. With the capital raised in 2021 and over $40 million in the bank, in addition to generating around $20 million in annual recurring revenue (ARR), RevenueCat is in a strong financial position. The company has also halved its burn rate since last summer. Eiting emphasized that deploying capital to accelerate growth is the best strategy for the company’s customers and investors. He revealed the company’s intention to take RevenueCat public within the next decade, in order to maximize value for developers and investors.
In conclusion, RevenueCat’s $12 million Series C funding round led by Adjacent marks an important milestone for the company as it expands its services to the web. The launch of RevenueCat Billing, a web SDK that enables developers to accept subscription payments from any website, comes at a critical time when Apple is facing regulatory pressure to open up its platforms to more competition. This funding will help RevenueCat develop new products, expand into new markets, and drive towards its goal of going public in the coming decade. With its comprehensive suite of tools and its focus on empowering developers, RevenueCat is poised to continue its growth as a leading subscription management platform for app monetization.
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