There’s little doubt that 2013 was the year of mobile messaging. WhatsApp continued its global dominance, surpassing 400m users, Snapchat bagged two significant funding rounds totalling more than USD100m, with a reported USD2bn valuation to boot and BlackBerry finally offered its Messenger app, the jewel in its fallen crown, across all smartphone platforms. While the dominant players take the plaudits, smaller, more niche players are sprouting up, illustrating the diverse ecosystem emerging. VC firms invested USD209.2m in 27 deals throughout the year, according to StrategyEye deal data. Here are six mobile messaging deals you might have missed.
Time-sensitive messages are Snapchat’s most popular aspect. But that’s not its USP. Self-destructing messaging apps are gaining popularity across the board, fuelled by increasing consumer concerns over privacy in the wake of the NSA revelations. Wickr describes itself as “halfway between Snapchat and Snowden” and raised USD7.4m in November. The app boasts “military-grade” encryption on video, image and text-based messages, as the firm attempts to leverage these consumer fears. Co-founder and CEO Nico Sell says that the firm has experienced an uptick in interest following the ongoing surveillance saga, but is keeping her cards close to her chest regarding user numbers. The road to success looks difficult. Sell is openly critical of social media’s use of personal information to target ads and Wickr is free to download, leaving monetisation opportunities limited. Challenging the most popular ephemeral messaging app in the world is a brave move, and the startup will need more than just iron-clad security to beat its more established rival at its own game.
Plucky Finnish startup Jongla is attempting to emulate the success of popular Asian services like Line, through the sale of in-app purchases like stickers. Jongla touts its stickers as its differentiator in Europe but while Line has shown that stickers certainly are monetisable, generating USD10m in revenue from them per month, the South Korean company has considerably more users, at 230m. Jongla is not revealing its user figures, but it’s safe to say that it is smaller, only launching its smartphone platform in January 2013, having previously aimed its teen-focused service at feature phones. But Scandinavian startups have typically shown grit and determination in cracking – and succeeding – in lucrative mainstream markets. That likely played a part in Oy Ingman Finance Ab ploughing USD1.9m into Jongla in November. The firm says that Asia is next on its growth roadmap, something that could bring it into competition with rival Line. If so, Jongla will need more financial backing to compete.
The enterprise could be the next big battleground of mobile messaging. With employees increasingly opting to use their own mobile devices in the workplace, a business-focused offering could well curry favour – and generate significant revenue. That’s what CoTap is banking on, with its workplace messaging service. Businesses are always looking for quicker and more efficient methods of employee collaboration and CoTap bagged USD5.5m in May to help achieve this. The startup comes from good enterprise communications stock, founded by two ex-Yammer execs, including the enterprise social network’s former product chief, Jim Patterson. Having only rolled out its service in October after a period in stealth mode, CoTap currently has little in the way of stats regarding traction. But Patterson, along with fellow co-founder Zack Parker say that the free download will soon add more traditional premium bring your own device (BYOD) features like mobile device management to further tempt business clients and add that moves onto wearable devices like Pebble’s smartwatch and Google Glass could also be in the pipeline.
Internet-based mobile messaging platforms are eating away at SMS revenues, traditionally a cash cow for mobile operators. HDMessaging is trying to help networks get back on the front foot. The startup offers a white-label service that helps firms offer both SMS and internet mobile messaging. San Francisco-based HDMessaging has already racked up an impressive list of clients including Vodafone, Airtel, Aircel, Singtel, and T-Mobile. The firm claims it is enjoying 200% quarter-over-quarter growth and offers interesting ways to monetise through its contextual recommendation engine that picks up on keywords mentioned within messages and offers sponsored results based on them. The offering sounds like the most promising of the hoard of mobile messaging services, but HDMessaging would be wise to expand beyond merely mobile operators going forward, with networks unlikely to win the battle against dedicated messaging startups, such is their ever-increasing popularity.
Video on mobile is big. Smartphones and tablets contribute 13% of all online video consumption, according to Ooyala and for the world’s largest video network, YouTube, it’s even higher at 40%. KeepTree is capitalising on this consumer thirst for video consumption with its messaging platform. Users can send video messages to one another and the firm is attempting to differentiate itself with scheduled messaging, claiming consumers can send video messages for up to 30 years in the future. The firm raised USD2.62m in April to further develop its product before teaming with global image repository Getty Images in October to bring licensed imagery to its offering. But with services like WhatsApp also enabling users to send video messages, standing out will be a tough ask no matter how hot the area is.
As the market develops and niche players emerge, it is how the services monetise their corner of the market that will prove crucial. UK messaging app PingTune thinks it has that licked – though it might prove trickier than it anticipates. The startup lets music lovers send each other tracks. Currently available on the iPhone, users can search for music and video content from sources such as YouTube and SoundCloud and choose whether to send a whole song or just a section from it. With monetisation through selling MP3 downloads and other music-related purchases reportedly in the pipeline, it has a leg up on messaging rivals that are yet to implement a solid business model – and with emotive content such as music, users might not be far behind. But squeezing revenue from digital music has never been trickier and PingTune may find that in this case, broader is indeed better.