Why Organic ASO Revenue Gets Higher App Valuation Multiples
Why organic ASO revenue gets higher app valuation multiples
We see many developers surprised when evaluating their apps. Two apps can both generate $10k per month in MRR, but they will not trade at the same multiple.
If your app reached $10k this month because you are actively spending money on Meta ads, the market may not even give it a 6x monthly revenue multiple. The risk of ad fatigue is too high.
But if your app has been quietly generating $10k per month for the last 5 years through organic App Store optimization, with zero marketing spend, that asset can trade at a much higher premium.
At AppRock, we model valuations around the stability of the acquisition channel.
Think of it like the SaaS industry. A software company that depends on an expensive, high-burn outbound sales team usually gets a serious valuation discount.
But a product-led growth company that acquires users through organic word of mouth can earn top-tier multiples.
In the app market, organic App Store search plays a similar role.
Stop valuing paid-traffic spikes as if they were permanent organic baselines.
We see many developers surprised when evaluating their apps. Two apps can both generate $10k per month in MRR, but they will not trade at the same multiple.
If your app reached $10k this month because you are actively spending money on Meta ads, the market may not even give it a 6x monthly revenue multiple. The risk of ad fatigue is too high.
But if your app has been quietly generating $10k per month for the last 5 years through organic App Store optimization, with zero marketing spend, that asset can trade at a much higher premium.
At AppRock, we model valuations around the stability of the acquisition channel.
Think of it like the SaaS industry. A software company that depends on an expensive, high-burn outbound sales team usually gets a serious valuation discount.
But a product-led growth company that acquires users through organic word of mouth can earn top-tier multiples.
In the app market, organic App Store search plays a similar role.
Stop valuing paid-traffic spikes as if they were permanent organic baselines.