A Household Name in the Mobile App World
Braavo Raises $70 million to Finance App Developers
Mark Loranger, Co-founder of Braavo Capital, is well-aware that the options for tech startups to get funding can seem limited. Mark founded Braavo with the goal of helping mobile app developers find a quicker, less expensive way to get funding. By integrating with an app’s sales, advertising, and analytics platforms, Braavo uses real-time performance data and innovative scoring & forecasting algorithms to offer non-dilutive funding for mobile growth.
To wrap up our series, we talked to Mark about growing Braavo, information asymmetry in assessing risk in the context of providing business funding, and how APIs are making it easier to gather data.
Tell us a bit about Braavo Capital
Mark: Braavo Capital is an automated financing platform for mobile app developers. We’ve built a robust tech platform that connects to our customers’ app store and analytics accounts so we can quickly and easily gather a lot of data on how their business is performing. By establishing this connectivity, we can analyze the app’s performance and provide these companies with funding solutions that are customized for their business.
What milestones really made a difference to the growth of your company?
Mark: Typically, demonstrating product-market fit is the first critical milestone for any tech company. Fortunately, we were able to prove this pretty early in our lifecycle, so I’d actually say the biggest milestone for us has been securing a scalable supply of debt capital. In order to close our first institutional debt financing, we needed to demonstrate several key performance metrics, such as: Can we provide financing in a scalable way? Does the debt asset we create have a desirable risk/return profile? It took time to create a platform and history of transactions that prove these metrics. Furthermore, we had to invest a great deal of time educating institutional debt investors about the value of our system and the customer in general.
What strategies will you implement over the next year to continue the growth of your business?
Mark: We want to be a household name in the mobile app world. We’ll do that through a variety of sales and marketing strategies, perhaps most importantly by telling the stories of the companies we’ve helped along the way. We’re fortunate to have a great portfolio of happy customers, so that’s a start.
We’ll also work to build relationships with other players in the ecosystem like mobile ad networks and analytics providers. It’s mutually beneficial — better-funded mobile app companies benefit our partners too!
Importantly, we need to educate our prospective customers about the different types of financing available to them. Most tech founders think raising equity is the only way to get funding to grow their businesses. We offer a much cheaper form of capital, and one that’s based on real performance. Rather than spending all their time trying to chase a big VC round, many founders would be better suited to consider a service like ours. It’s quick and easy, allowing them to focus on building great products instead of fundraising and due diligence.
APIs are evolving as an industry standard. How do you leverage these interfaces in the development of your product?
Mark: We offer our customers the ability to plug and play their data sources into our platform. We have to build custom integrations for all of those sources, so platforms that offer APIs make that much easier. Some don’t, however, and we have to find alternate ways to access the data. APIs make it faster and easier to work with a solution, rather than creating complex parsing technology or custom webhooks (for example). As APIs become more available, it makes it easier for us to deliver insights and financing to our customers.
How are APIs and open data influencing the growth of your product and business?
Mark: I think for the most part, the data we’re getting isn’t open. Our customers authorize us to access their private data. The market we’re addressing though — mobile apps — are built on platforms that have standards in data connectivity, which means we don’t have to create massive customization on our end for each new customer. That’s one of the reasons we’ve been able to scale.
Today, businesses are more digital, so it’s easier to access their information through public digital platforms. When it comes to providing capital, information asymmetry is generally a limiting factor. Historically with small business lending, there tends to be asymmetry — you generally don’t know what you need to know when it comes to providing financing. This makes it difficult to provide cheap capital, particularly for new types of businesses where there’s less familiarity with business models. As you can imagine, this is an acute problem for our customers, as the industry has only existed for about 10 years!
In that context, a big part of what we’ve built is a system for reducing that asymmetry by making it easy for us to access and analyze a massive amount of business performance data. For our own customer acquisition, we also use APIs to determine metrics for companies not in our system. For example, we’ve worked with Apptopia in the past to learn more about our prospective customers, which helps us in targeting apps or categories for our outreach.
What does the future of this movement look like?
Mark: I tend to avoid hypothesizing about where any particular movement is going, but it’s hard to ignore blockchain and distributed ledger technology when it comes to data authentication, connectivity, permissions, etc. Ultimately for us, the goal is to leverage the connectivity of business data to provide the most affordable capital and powerful insights to help our customers succeed. With that in mind, we’ll explore any opportunity that advances that mission.
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