Here is some insight on how valuations are considered to help you value your own apps!
Valuing your app has a direct correlation with the consistency of your app’s downloads and revenues. In order to value them, the basic algorithm for this will be the download or revenue variable times the time for Return of Investment (ROI) expected by the buyer. There are 3 main buckets that apps fit into when being listed on our site:
- Having been on the store for less than 6 months with consistent revenue for at least 3 months
- Having been on the store for more than 6 months with consistent revenue for at least 3 months
- Having consistent downloads for 3 months or more with no real revenue to speak of
When an app has been on the store for less than 6 months and has a consistent source of revenue for at least 3 months, you can expect an acquisition price of between 8-10 months worth of revenue. For example, if Sam has a puzzle app, which has been on the market for 4 months, and it makes approximately $400 a month from in app purchases, advertisements, and the paid version of the app, he should expect to sell his app for around $3500.
When an app has been on the store for more than 6 months and has a consistent source of revenue for at least 3 months, you can expect an acquisition price of between 12-14 months worth of revenue. For example, if Noah has a utility app, which has been on the market for 9 months and has been making $600 a month from advertisements and the paid version, he should expect to sell his app for around $8000.
When an app has a high number of consistent downloads for 3 months or more without necessarily monetizing, you can expect to an acquisition price of approximately $0.05 per download for a 6-8 month return of investment. For example, if Maya has a productivity app that has gotten approximately 1000 downloads per day over the last 4 months, she should expect to sell her app for around $30,000.
- Why a 1-year payback?
- This is because of how volatile the app market is and the fact that any purchase they make in this space is incredibly risky. Having said that, it makes a lot of sense to sell at a 1-year multiple (and why so many developers do) because there are no guarantees: Apple/Google can remove them, your ads may become less efficient, your space can become saturated; all apps and app portfolios have a downward trend over time.
- Should I make a bundled listing to increase the downloads/revenue numbers of the listing with many different apps?
- Actually, you should not make a bundled listing or sell your entire portfolio because buyers are not looking to acquire so many at once and managing that great of a number of apps. We suggest you create many smaller listings with lower Buy It Now prices, which means you are more likely to sell both faster and ultimately for more money combined.
- My app has only been on the app stores for 2 months, can I value this?
- Be aware that the first couple of months are tricky for all apps - some trend well at first and then stop having as much organic growth, others require time to gain traction in the app market so their first months are weak. You can't really value an app if it has less than 3 months of data; ideally you want to see 12 so you can see what a full year looks like and maybe pick up on some trends and seasonality.
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