Capital.bg: ‘Easy-peasy mobile apps’
We are excited to announce that one of the most influential business media in Bulgaria- Capital.bg featured an interview with Appzio’s founders last week. Many thanks to Aleksandra Kozbunarova for the wonderful piece. The original article in Bulgarian can be found here. For the English translation, read below:
On a regular Thursday in August 2016, Unicredit Bulbank contacts Appzio’s team to ask if they can develop a mobile app which would enable their employees to evaluate each other and give feedback. On Tuesday morning, the week after, the software is ready. ‘Well, we could’ve slept more and finished on Thursday, but we wanted to impress them’- shares in laughter Branimir Parashevov, one of the three founders of Appzio. The fast and precise work of the team brings in not only a content customer but also an investor. In 2017 Unicredit Bulbank invests 450 000 euro in the company in the form of a convertible loan.
Since its incorporation in 2015, the Bulgarian-Finnish company has been working on a technology that makes the development of mobile apps ten times faster than usual. The software is custom-made for the concrete client and operating system (the so-called ‘native app’) and it’s not just a ready-made solution. ‘That’s impossible’ is one of the comments we often hear and we love turning such skeptics into clients’ — comments Parashkevov.
First years
Thanks to the technology that has been developing for the past three years, Appzio has found their formula for fast and quality delivery of mobile apps. The story begins in 2006 when Timo Railo first comes to Bulgaria. He had just started his digital agency in Finland and couldn’t find enough manpower there.
He gathers a team and in 2007 he opens an office in Varna for his company East Interactive to start working for the international market. One of the most demanded services is the development of mobile apps. At the time this is a slow and expensive process because it requires developers that can work with different languages and operating systems, as well as good communication skills to deal with clients. While years pass by, the issue remains at the back of his head. In the meantime, he meets Branimir Parashkevov, who at the time is a business development manager in a company for mobile payments and Simeon Mitev, who had managed projects with companies such as Google, Netflix, and Nokia. Both of them join as co-founders in Railo’s new venture.
In 2014 the three of them start working on a technology that would allow the fast and easy development of mobile software. The year after they officially register their own company — Appzio. The three founders start with 200 000 EUR of investment. At first, they target developers with the idea to make the app building process easier for them.
The investment fund, Eleven Ventures, acquires 10% of the company for 100 000 EUR in 2015. Soon after, a few business angels join. Among them is the CEO of the software company ‘Nemecheck’, Georgi Brashnarov, the president of SAP Labs Bulgaria, Stamen Kochkov and Nikolay Mavromatis from the Association of the Bulgarian Business Angels. The total amount of money, invested from the business angels in Appzio, is 50 000 euro and together they hold 2% of the company shares, according to the National Trade Register.
The tuning of the business model
Despite the fresh capital, the contacts presented by the investors and the developed technology, Appzio still struggles to achieve results at the speed they planned. And that stops the growth as well.
‘Back then we thought that anyone could create a mobile app — we wanted to build the technology for that’ — explains Railo. The platform functions as a Do-It-Yourself SaaS software. This means that as a user you register, then you pay the subscription and develop your app. As it turns out, this is not a working model. ‘The possibility was attractive to many people, yet not all of them had the necessary experience to imagine a whole application. This simply wasn’t the best option for us. It was also a cheap market.’ — adds Parashkevov. At this point, Railo, Parashkevov, and Mitev start thinking about shifting the focus towards people with development skills or those in need of a fully functional product.
In the first few months of 2016, the company manages to generate 134 000 EUR in revenue with just 5 people in the team. Soon after, Unicredit Bulbank joins as an investor with 450 000 EUR
Today Appzio is determined to sell mobile apps with a license to the end users and to cooperate with more partners to develop the software using the Appzio platform. In other words, Appzio’s team acquires the clients, consults them and offers them options than the partnering companies, among which are Melon and Programista, develop the app. Depending on the specifications, the mobile software costs between 10 000 EUR and 20 000 EUR, and the yearly license for using the platform is 2,500 EUR per app.
Besides that, Appzio is working on another niche of companies — those with internal development teams. They can buy just the license and use the technology to build their app. ‘Our goal is when someone decides to build a fully functional mobile app to think of us first’ — says Parashkevov.
An infinite market
The new business model allowed the company to develop over 100 apps in less than two years. ‘It is hard to determine the size of the market for this service. There are over 1300 new apps every day in the Android App Store alone. We can only say that this is a constantly growing market’- comments Parashkevov. At the moment Appzio is working with clients from all around the globe — Europe, USA, Asia, Australia. Soon they’ll start working with the Middle East as well. The company’s main priority is the English- speaking markets.
Appzio has a lot of potential markets and growth opportunities, but there’s also a lot of competition. The Bulgarian company stands against giants such as Facebook with their development service ReactNative and Microsoft’s Xamarin. There are also other low-code platforms (tools that use a visual interface instead of code to create the app, thus are accessible for non-devs) like Mendix and Outsystems. Then there are other young startup companies in the niche as well. ‘Our main advantage is that we have access to the hardware of the devices for which we build the apps. That way we can take into account their technical specifications ’ — explains the CTO, Timo Railo.
Despite the crowded competitive space they operate in, Appzo’s team is making its way up. In 2017 the revenue of the company doubled its size according to Parashkevov. The founders even expect to start making a profit in 2018. It’s possible that Appzio might look into attracting more investors. There are two reasons for it. The first one is that now after the technology is mature enough, it needs more Marketing. The other reason lies is the fact that Appzio seeks a new strategic partnership with a big tech company to take advantage of its experience and client portfolio.
To this moment Appzio’s team worked hard and kept a low media profile, but the company promises that in 2018 we’ll hear more about them.
Q&A
Who are your clients?
Branimir Parashkevov: It’s hard to set a trend as they are different. We have corporate clients, startup companies, and even communities. For example, recently we developed an app for an American tattoo community. They wanted their potential clients to find them easier and get a recommendation for a tattoo artist based on their location and the desired tattoo style. What can be said is that around 70% of our clients are small and mid-sized businesses and startups. We are proud that among our clients is one of the largest logistics companies in the world.
Are there any tendencies in the clients’ demands?
We often hear the question ‘Can we get something like Tinder?’. The clients often search for apps that have the function to swipe options left and right on the display. It could literally be used in every case. Two-thirds of our clients look for consumer apps that are built for the end user. The rest want a software that solves internal company issues such as to improve the communication or optimize the processes.
