The archive · Developer & Business Tools · Product decision · 2017–2018
RevenueCat hit $350K monthly volume by YC S18 Demo Day on its outsource-subscriptions bet
Founded by two Elevate alumni after subscriptions saved that app, RevenueCat's subscription API processed $350,000 a month by its August 2018 YC Demo Day.
RevenueCat
What the business is
RevenueCat sells an API that handles in-app subscriptions on iOS and Android — billing, renewals, platform quirks and cross-platform subscription data — so developers do not build and maintain store-specific subscription logic.
How it started
Jacob Eiting was CTO and Miguel Carranza director of engineering at brain-training app Elevate, where moving the business from one-off purchases to recurring subscriptions 'saved the company.' Eiting left Elevate more than a year before mid-2018 and decided to build a startup around what he called 'this weird skill I have' — in-app subscription management. RevenueCat was part of Y Combinator's Summer 2018 batch.
What happened
RevenueCat offered an API for in-app subscriptions on iOS and Android so developers did not have to track each platform's nuances, bugs and updates, and it pulled subscription data from across platforms into one place. In a TechCrunch profile on 2018-07-23, Eiting described a roadmap toward a broader revenue management platform where developers could try strategies like different prices for different customer segments, and argued that subscriptions realign incentives and offer a way out of the 'race to the bottom in how software is sold.' At YC S18 Demo Day 2 on 2018-08-21, the nine-month-old company said it was seeing $350,000 in transaction volume every month, taking an undisclosed percentage of that amount.
No ending yet — it is still running.
Background
RevenueCat was founded by Jacob Eiting and Miguel Carranza, who had watched subscriptions save the brain-training app Elevate after it switched from one-off purchases to recurring revenue. Eiting left Elevate more than a year before mid-2018 and chose to build a company around the unglamorous skill he had developed: managing in-app subscriptions on mobile platforms.
The product was an API for iOS and Android subscriptions, letting developers skip the nuances, bugs and updates of each store's billing system and see all their subscription data in one place. Eiting told TechCrunch that subscription billing is work developers do not want to do, and that his roadmap pointed toward a broader revenue management platform where developers could run experiments like different prices for different customer segments.
By YC S18 Demo Day 2 on 2018-08-21, the nine-month-old company reported $350,000 in monthly transaction volume flowing through its API and took an undisclosed percentage of that amount. The bet was that mobile software's future is recurring revenue, and that developers would rather rent reliable subscription plumbing than build it themselves.
What has to be true
- The founders had first-hand proof of the pain: Elevate's shift from one-off purchases to subscriptions saved the app, so the problem was real before RevenueCat wrote its first line.
- Subscription billing is critical but boring, which is a classic wedge: developers will pay for reliability in a task they do not want to staff.
- The API answered a platform-shaped mess: iOS and Android each change subscription rules and bugs, so one integration had value that grew with every store update.
- The data angle compounded the product: every subscription transaction passed through RevenueCat, making it the system of record for an app's revenue and a base for pricing tools later.
What can be applied
A startup can be built from one team's boring, painful competence: Elevate's subscription switch proved the problem, and RevenueCat sold the fix as an API before the category had a name.
Aftermath
As of 2018-08-21, RevenueCat was live in Y Combinator's Summer 2018 batch with an API for iOS and Android in-app subscriptions and $350,000 in monthly transaction volume after nine months. TechCrunch had profiled the company on 2018-07-23, and its Demo Day 2 listing appeared in a roundup that drew 135 points and 91 comments on Hacker News. Eiting's stated direction was a broader revenue management platform for subscription experiments; the thread and article record no funding round or later milestones as of that date.
Sources
- All 59 startups that launched today at Y Combinator's S18 Demo Day 2
- YC-backed RevenueCat helps developers manage their in-app subscriptions
- Y Combinator S18 Demo Day 2 startups — Hacker News discussion
spotted an error? The archive wants to know.
Your turn
You just read one. Describe what you are building, and see who is betting on the same thing.
Free account · 3 free questions · no card