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AppsFunder Review

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AppsFunder Review

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Date Established
2011
Location
Antwerp, San Francisco

Pros

  • Crowdfunding tailored to app makers
  • You can offer backers rewards or revenue sharing

Cons

  • High fees
  • Platform is little-used
  • Over-complicated rewards
  • AppsFunder takes 5% of your 1st-year app revenue

Overview

Crowdfunding platforms are proliferating and become more popular by the year, and now along comes AppsFunder with its unique focus on… wait for it… app funding.

Founded in Belgium by Pascal De Keyser in 2011, AppsFunder is a very different kind of crowdfunding site. This isn’t solely due to the exclusive focus on apps, but also due to AppsFunder’s particular means of conducting crowdfunding. With AppsFunder, if your app project gets approved to conduct a crowdfunding campaign, your potential backers can support you via two different methods. They can “buy” a Reward Pack (a set of perks that you specify) or they can enter into a Revenue Share, an investment-like arrangement where they send you money in defined amounts with the promise of earning a return on their investment out of the revenues generated by your app after it his the market.

It’s an unusual arrangement, to be sure — one that has yet to garner much attention to AppsFunder. In fact, upon reading through the pages on AppsFunder’s site, I was left confused by some of the oddly-phrased text. Does AppsFunder translate well to the modern app maker in search of funding? Let’s find out.

Services Offered

AppsFunder is what it sounds like it is: a crowdfunding platform for app development. You sign up with the site and describe your app vision, and if AppsFunder likes what you’ve laid out, they’ll approve you to start fundraising using the two methods described above. One thing to keep in mind is that along with charging a fee on the money you raise, AppsFunder will also take a percentage of your app earnings for a period of one year after your app is released.

Project Qualifications

Unlike many other crowdfunding services, AppsFunder doesn’t have a long list of guidelines that a project must adhere to in order to collect funds. Rather, AppsFunder simply lists three factors by which app projects will be judged before being allowed to fundraise:

  1. Does it fit our market focus?
  2. Is there an acceptable level of professionalism and realism for the project? We check profiles, websites, and company data if available. But more importantly, we will discuss with project owners in detail and make a sound judgment.
  3. We check that the app-content is compliant to the distribution-guidelines by Apple and Google for their app markets.

Terms and Fees

These are the terms and fees for AppsFunder’s crowdfunding campaigns:

AppsFunder fee:8%
Payment Processing fee (PayPal):4% (charged to backers)
% taken by AppsFunder from your 1st year of app revenues:5%
Funding policy:All or nothing

AppsFunder’s fees are significantly higher than those of crowdfunders like Kickstarter or Indiegogo. In fact, a platform fee of 5% has pretty much become the standard in the industry. AppsFunder boldly challenges this paradigm by charging 8% instead. Yikes.

Payment processing fees are also higher than the near-standard rate of about 3%. In fact, 4% of each pledge will go to the payment processor, PayPal, though this fee is assessed to the backer when they make their pledge. But wait! There’s more! If your funding campaign is ultimately successful and you release your finished app for sale on Apple’s App Store or Google Play, 5% of the revenues you earn will go to AppsFunder for the first 12 months of availability. Be warned: AppsFunder will be taking a healthy chunk of your money at each stage of the process.

If this warning leaves you undaunted (and I’m not necessarily saying it should), I’ll explain the terms of AppsFunder’s crowdfunding campaigns. Funding is all-or-nothing, meaning that if you don’t reach your fundraising goal by the end of your funding period, your backers will be refunded and you’ll get nothing. Additionally, AppsFunder requires that you set milestones within your funding goal. AppsFunder describes these milestones like so:

Milestones is [sic] a way to divide the total investment in small parts, based one [sic] partial goals that the project needs to achieve. For example: A project of $6,000 can be divide in milestones of $3,000 to design and $3,000 to development of the app. The money will be pay [sic] to the project owner, when a milestone has been reached. In this case, the project owner will receive the first part of the money when $3,000 has been funded. This means that the funding of the project is an ongoing process, which ensure [sic] that project [sic] will be kept going and that the funders can see what the money is used for.

Are you down with the [sic]-ness?

Let’s now delve into how your backers can get involved in funding your campaign. As I explained in the intro, a backer can either send you money in exchange for a Reward Pack comprised of rewards of your choosing, or they can purchase a Revenue Share. Revenue Share pledges can be made in one of three amounts:

  • Fund $25 USD (or the equivalent in € or GBP) and get $40 back from the app revenues
  • Fund $50 USD (or the equivalent in € or GBP) and get $80 back from the app revenues
  • Fund $100 USD (or the equivalent in € or GBP) and get $220 back from the app revenues

It’s an odd offer, considering the fact that the three different dollar amounts you can pledge as part of the revenue sharing program are all rather small.

I’ll leave it to you to decide if this convoluted system with high fees is justified by the value provided by AppsFunder’s unique crowdfunding model.

Application Process

AppsFunder asks for the following information when you submit your app for approval:

  • The name of your project
  • The platform on which you will build it, and the type of app
  • The milestones you want to use during the funding process
  • The target investment-amount per milestone
  • A short but powerful pitch regarding what makes your app unique
  • At least one app icon picture and one screenshot

Sales and Advertising Transparency

AppsFunder lays out all their terms and conditions on their site, though the information isn’t presented in a very efficient way. You have to go digging for it by following the “How It Works” link on the navigation bar of the homepage.

Customer Service and Technical Support

Beyond the How It Works page, the only visible means of contacting AppsFunder is a contact form, though you can find a few email addresses of people at the company if you poke around for a while.

Reviews and Complaints

I scoured the ol’ Information Superhighway, but was able to find virtually no feedback regarding people’s experiences with AppsFunder, whether from professional reviewer or user. Not a good sign as to the company’s health, honestly.

Final Verdict

The concept behind AppsFunder makes a lot of sense: a crowdfunder devoted solely to funding the creation of apps. And while AppsFunder’s unique methods of connecting backers to app makers show a lot of innovative potential, the fees are higher than those of the competition. Perhaps a more damning sign is the fact that most of the “top projects” listed on AppsFunder’s website have no money pledged to them whatsoever! Between the lack of donor interest to the typo-ridden website to the high fees, I would be remiss if I told you that launching a crowdfunding campaign with AppsFunder would be a worthwhile use of your time. The concept is a good one, but the execution leaves a lot to be desired. Two stars.

Jason Vissers

Jason Vissers

Jason Vissers is a writer and cereal chef from San Diego. He graduated with a Political Science degree from San Diego State University in 2001. He's been writing about website builders, crowdfunding sites, online lenders, and credit cards for Merchant Maverick since 2015. Additionally, Jason can't eat raisins.
Jason Vissers
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