Why Current Mobile App Valuations May Change Soon
Why current mobile app valuations will change soon
Two years ago, buying a mobile subscription business felt like the Wild West. There were no clear valuation platforms, and deals were done mostly behind closed doors or through non-specialized services.
Today, this market is becoming a more transparent asset class.
Since the beginning of autumn, we have completed deals worth a few million dollars. The key detail in these figures is not only the total transaction volume, but the valuation multiples.
Today, the market still allows investors to acquire apps with an established organic base for 20 to 30 months of projected revenue. In practice, this can produce returns of 30-50% per year.
For comparison, investments in finished real estate may yield around 5% per year, which often does not cover the real inflation rate.
This gap exists mostly because of timing.
The mobile app investment niche has not yet become overheated. When more retail capital enters the market in search of inflation protection, valuation multiples will likely rise.
The payback period may stretch to 5-7 years, as usually happens with asset classes that become easy to understand and accessible to a wider investor base.
The current phase of market formation offers a significant premium for early entry.
Have you noticed similar valuation inflation in other niches when mass investors enter the market?
Two years ago, buying a mobile subscription business felt like the Wild West. There were no clear valuation platforms, and deals were done mostly behind closed doors or through non-specialized services.
Today, this market is becoming a more transparent asset class.
Since the beginning of autumn, we have completed deals worth a few million dollars. The key detail in these figures is not only the total transaction volume, but the valuation multiples.
Today, the market still allows investors to acquire apps with an established organic base for 20 to 30 months of projected revenue. In practice, this can produce returns of 30-50% per year.
For comparison, investments in finished real estate may yield around 5% per year, which often does not cover the real inflation rate.
This gap exists mostly because of timing.
The mobile app investment niche has not yet become overheated. When more retail capital enters the market in search of inflation protection, valuation multiples will likely rise.
The payback period may stretch to 5-7 years, as usually happens with asset classes that become easy to understand and accessible to a wider investor base.
The current phase of market formation offers a significant premium for early entry.
Have you noticed similar valuation inflation in other niches when mass investors enter the market?