Pollen VC Building A Digital Lending Business

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  • BUILDING A DIGITAL LENDING BUSINESS RITESH THADANI 1
  • BUILDING A DIGITAL LENDING BUSINESS Building a Digital Lending Business ABOUT POLLEN VC • Global App Marketplace is a $25Bn market growing to $142Bn within three years* • We help app developers unlock their app store earnings early to fuel growth and deploy venture capital more efficiently • New data-driven approach to lending - our tech platform connects directly to central billing system for digital products to price risk in real time *Source: Vision Mobile Developer Economics Survey Feb 2014 2
  • BUILDING A DIGITAL LENDING BUSINESS PROBLEM: PLATFORMS ONLY PAY OUT REVENUE UP TO 60+ DAYS AFTER YOU’VE EARNED IT. LAUNCH You’re earning money from day 1 This is your money trapped in the payment system Platforms release your cash… 3
  • BUILDING A DIGITAL LENDING BUSINESS Reinvest directly into advertising Acquire more users more quickly Draw down earnings on a daily basis A NEW WAY… 4
  • BUILDING A DIGITAL LENDING BUSINESS TYPICAL LAUNCH SCENARIO LAUNCH Fail to get credit with ad networks Can’t reinvest to acquire more users Get paid by platforms DOWNLOADS REVENUE R ev en ue / D ow nl oa ds Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 5
  • BUILDING A DIGITAL LENDING BUSINESS 6
  • BUILDING A DIGITAL LENDING BUSINESS FUNDING FOR FINTECH Building a Digital Lending Business Amount $ Capital Markets Banks Family Offices Equity Capital Data/Model Validation 7
  • BUILDING A DIGITAL LENDING BUSINESS DIGITAL Creation and shipping of physical goods Invoices created at end of month and posted/emailed. Paid 30,45,60 day terms Advertising booked weeks in advance - eg TV campaigns, direct mailings Factoring/Discounting solutions available to shorten cycles at a cost App Store Marketplace - Real time economics Consumers purchase digital product real-time - billed to credit cards instantly Advertising purchased in real time through RTB exchanges Lack of financial products eg invoice financing 30 days is a long time. 60 days is an eternity! VS OLD WORLD COMPARISON PHYSICAL 8
  • BUILDING A DIGITAL LENDING BUSINESS STRUCTURE 9
  • BUILDING A DIGITAL LENDING BUSINESS GROWTH IN THE LONG TAIL Building a Digital Lending Business •c. 70,000 developers making more than $10k/year across iOS and Google Play •L-Shaped revenue curve is flattening out •More opportunities for developers in the long tail •User acquisition becoming better understood 10
  • THANK YOU ritesh@pollen.vc @thadani Follow us at @PollenVC mailto:martin@pollen.vc?subject=
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  • BUILDING A DIGITAL LENDING BUSINESS RITESH THADANI 1
  • BUILDING A DIGITAL LENDING BUSINESS Building a Digital Lending Business ABOUT POLLEN VC • Global App Marketplace is a $25Bn market growing to $142Bn within three years* • We help app developers unlock their app store earnings early to fuel growth and deploy venture capital more efficiently • New data-driven approach to lending - our tech platform connects directly to central billing system for digital products to price risk in real time *Source: Vision Mobile Developer Economics Survey Feb 2014 2
  • BUILDING A DIGITAL LENDING BUSINESS PROBLEM: PLATFORMS ONLY PAY OUT REVENUE UP TO 60+ DAYS AFTER YOU’VE EARNED IT. LAUNCH You’re earning money from day 1 This is your money trapped in the payment system Platforms release your cash… 3
  • BUILDING A DIGITAL LENDING BUSINESS Reinvest directly into advertising Acquire more users more quickly Draw down earnings on a daily basis A NEW WAY… 4
  • BUILDING A DIGITAL LENDING BUSINESS TYPICAL LAUNCH SCENARIO LAUNCH Fail to get credit with ad networks Can’t reinvest to acquire more users Get paid by platforms DOWNLOADS REVENUE R ev en ue / D ow nl oa ds Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 5
  • BUILDING A DIGITAL LENDING BUSINESS 6
  • BUILDING A DIGITAL LENDING BUSINESS FUNDING FOR FINTECH Building a Digital Lending Business Amount $ Capital Markets Banks Family Offices Equity Capital Data/Model Validation 7
  • BUILDING A DIGITAL LENDING BUSINESS DIGITAL Creation and shipping of physical goods Invoices created at end of month and posted/emailed. Paid 30,45,60 day terms Advertising booked weeks in advance - eg TV campaigns, direct mailings Factoring/Discounting solutions available to shorten cycles at a cost App Store Marketplace - Real time economics Consumers purchase digital product real-time - billed to credit cards instantly Advertising purchased in real time through RTB exchanges Lack of financial products eg invoice financing 30 days is a long time. 60 days is an eternity! VS OLD WORLD COMPARISON PHYSICAL 8
  • BUILDING A DIGITAL LENDING BUSINESS STRUCTURE 9
  • BUILDING A DIGITAL LENDING BUSINESS GROWTH IN THE LONG TAIL Building a Digital Lending Business •c. 70,000 developers making more than $10k/year across iOS and Google Play •L-Shaped revenue curve is flattening out •More opportunities for developers in the long tail •User acquisition becoming better understood 10
  • THANK YOU ritesh@pollen.vc @thadani Follow us at @PollenVC mailto:martin@pollen.vc?subject=
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