Momentum Labs · firm that buys and runs apps
Buy apps ranked #3-5 in their category and move them up 2-3 spots
Revenue grew 50-200% per acquired app, not 5-15%
Workedportfolioexit-maaso
What they did
From 2015-2016, rather than build from scratch against incumbents, Momentum Labs bought apps with proven product-market fit that ranked 3rd, 4th or 5th in their category, aiming to move each up two or three spots. The logic: category share is a power law (#1 ~45%, #2 ~25%, #3 ~15%, #4 ~7%), so each spot roughly doubles revenue. They judge success on stable grossing-chart position, not bought download rank. Paid 'fair prices for great businesses'; stopped buying at end of 2019 when prices rose.
What happened
Revenues grew 50%, 85%, 125%, 200% instead of 5-15%.
- Stage
- Exit (Acquired apps with existing traction)
In their words
Sub Club by RevenueCat · How Freemium Can Outperform Free Trials – Shaun Steingold, Momentum Labs“And we wanted to come in and find opportunities to buy an app where in their category they were ranked three, four, or five,”
“and we had the set objective of moving them up two to three spots in that ranking list. And if we did that, our revenues didn't grow 5, 10, 15%. They grew 50%, 85%, 125%, 200%”
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