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    This document discusses building a digital lending business to help app developers access funds from their daily app revenue earlier. It notes that platforms currently only pay out revenue 60+ days after it is earned, preventing developers from reinvesting in user acquisition and growth. The proposed solution is for a lending platform to connect directly to developers' billing systems to provide daily draws on earned revenue and price risk in real time. This would allow developers to reinvest in advertising and acquire more users more quickly than relying solely on platform payouts. The document compares this digital lending model to traditional invoice financing and factoring solutions for physical goods businesses. It outlines the structure of such a lending platform and notes growth opportunities in helping the large number of developers in the

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    Building a digital Lending Business - RITESH THADANI

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    This document discusses building a digital lending business to help app developers access funds from their daily app revenue earlier. It notes that platforms currently only pay out revenue 60+ days after it is earned, preventing developers from reinvesting in user acquisition and growth. The proposed solution is for a lending platform to connect directly to developers' billing systems to provide daily draws on earned revenue and price risk in real time. This would allow developers to reinvest in advertising and acquire more users more quickly than relying solely on platform payouts. The document compares this digital lending model to traditional invoice financing and factoring solutions for physical goods businesses. It outlines the structure of such a lending platform and notes growth opportunities in helping the large number of developers in the

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    © All Rights Reserved
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    48 views11 pages

    Building A Digital Lending Business - RITESH THADANI

    Uploaded by

    Fabio
    This document discusses building a digital lending business to help app developers access funds from their daily app revenue earlier. It notes that platforms currently only pay out revenue 60+ days after it is earned, preventing developers from reinvesting in user acquisition and growth. The proposed solution is for a lending platform to connect directly to developers' billing systems to provide daily draws on earned revenue and price risk in real time. This would allow developers to reinvest in advertising and acquire more users more quickly than relying solely on platform payouts. The document compares this digital lending model to traditional invoice financing and factoring solutions for physical goods businesses. It outlines the structure of such a lending platform and notes growth opportunities in helping the large number of developers in the

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    of 11

    BUILDING A DIGITAL LENDING BUSINESS

    RITESH THADANI

    1
    ABOUT POLLEN VC
    • Global App Marketplace is a $25Bn market growing to
    $142Bn within three years*

    • We help app developers unlock their app store earnings


    early to fuel growth and deploy venture capital
    more efficiently

    • New data-driven approach to lending - our tech platform


    connects directly to central billing system for digital products
    to price risk in real time

    Building a Digital Lending Business

    *Source:Vision Mobile Developer Economics Survey Feb 2014

    BUILDING A DIGITAL LENDING BUSINESS 2


    PROBLEM: PLATFORMS ONLY
    PAY OUT REVENUE UP TO
    60+ DAYS AFTER YOU’VE
    EARNED IT.
    Platforms
    release your
    cash…

    LAUNCH
    You’re earning money from
    day 1

    This is your money


    trapped in the payment system

    BUILDING A DIGITAL LENDING BUSINESS 3


    A NEW WAY… Acquire more users
    more quickly

    Draw down earnings


    on a daily basis

    Reinvest directly
    into advertising

    BUILDING A DIGITAL LENDING BUSINESS


    TYPICAL LAUNCH SCENARIO
    Fail to get DOWNLOADS REVENUE
    credit with
    ad networks

    Can’t
    Revenue / Downloads

    reinvest to
    acquire more
    users

    Get paid by
    platforms

    LAUNCH

    Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015

    BUILDING A DIGITAL LENDING BUSINESS 5


    6

    BUILDING A DIGITAL LENDING BUSINESS


    FUNDING FOR FINTECH

    Amount $

    Capital Markets

    Banks

    Family Offices

    Equity Capital

    Data/Model Validation

    Building a Digital Lending Business

    BUILDING A DIGITAL LENDING BUSINESS 7


    OLD WORLD COMPARISON
    PHYSICAL DIGITAL
    Creation and shipping of physical App Store Marketplace - Real time
    goods economics

    Invoices created at end of month Consumers purchase digital product


    real-time - billed to credit cards
    and posted/emailed. Paid
    instantly

    VS
    30,45,60 day terms
    Advertising purchased in real time
    Advertising booked weeks in through RTB exchanges
    advance - eg TV campaigns, direct
    mailings Lack of financial products eg invoice
    financing
    Factoring/Discounting solutions
    available to shorten cycles at a 30 days is a long time. 60 days is an
    cost eternity!

    BUILDING A DIGITAL LENDING BUSINESS 8


    STRUCTURE

    BUILDING A DIGITAL LENDING BUSINESS 9


    GROWTH IN THE LONG TAIL

    •c. 70,000 developers making more than $10k/year


    across iOS and Google Play

    •L-Shaped revenue curve is flattening out

    •More opportunities for developers in the long tail

    •User acquisition becoming better understood

    Building a Digital Lending Business

    BUILDING A DIGITAL LENDING BUSINESS 10


    THANK YOU
    ritesh@pollen.vc

    @thadani

    Follow us at @PollenVC

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