This is what you can learn from our free report: -How to use the App Annie Matrix framework to identify breakout app publishers before they become the next Uber -Real examples from Q1 2015 demonstrating how publishers (of both games and non-games) went from good to great -Case studies looking at companies over longer time periods, tracking changes that coincided with app store success and funding rounds Have you ever been tasked with finding fast-growing app publishers before they became huge? Anyone who’s tried will tell you — it’s no easy task given the sheer number of companies releasing apps. Recognizing this, our analysts created a framework that makes identifying and tracking top-growing companies much easier. Whether you’re putting together an app industry investment portfolio, deliberating your next partnership or acquisition, or simply building out a competitive analysis, our latest report will give you the tools to make informed decisions. We’re excited to announce the release of our newest report, The App Annie Matrix: A Tool to Identify Breakout Companies. You don’t need to be a seasoned financial analyst or strategy consultant to get value from this report — we designed it with a large range of users in mind. Inside you can find our framework for identifying high-growth companies demonstrated through real examples and videos. You’re about to get a lot savvier. See more at: http://blog.appannie.com/introducing-the-app-annie-matrix/

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The App Annie Matrix:
A Tool to Identify Breakout Companies
© App Annie 2015

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The App Annie Matrix: A Tool to Identify Breakout Companies
Table of Contents
1. The Problem of Plenty in the App Economy
2. The App Annie Matrix
● Introduction
● App Annie Matrix for Worldwide Application Downloads
● App Annie Matrix for Worldwide Game Downloads
● App Annie Matrix for Worldwide Game Revenue
3. Historical Case Studies
● Etermax
● ContextLogic
● Sankuai
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The App Annie Matrix: A Tool to Identify Breakout Companies
1. The Problem of Plenty in
the App Economy
Since 2008, the growth of app stores has had a profound influence on distribution in the
software industry. From the “Wild West” of the desktop web era where developers had to set
up and manage their own distribution and payment channels, we have transitioned into a
“plug­and­play” era. Essentially, app stores have significantly lowered the barriers to entry into
the consumer software industry. As a result, the app economy is now home to hundreds of
competitors as compared to a handful in most traditional industries. But this has also created
a unique challenge.
We have observed that many app store category leaders hold a market share of roughly
5­10% by downloads, while the top 5 companies own a cumulative share of about 20%. This
is in stark contrast to most consumer industries where these figures are closer to 20% and
50%, respectively. The app economy is also highly dynamic and the next big hit frequently
comes from new developers or ones that were unheard of until that point (ranked in the
hundreds with market share in the range of 0.1% or less). In this world, identifying
high­potential companies early in their lifecycle is akin to finding a needle in a haystack.
However, the nature of this industry makes it very important to study fast­growing players, not
only for investors, but for app publishers as well. The rapid growth of new apps could be the
result of new, innovative features or the creation of valuable new markets. In either case,
learning about fast­growing developers before they reach critical mass could help shape the
M&A strategy, competitive strategy or product roadmap of an app publisher. This is something
we hope to enable with the App Annie Matrix.
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The App Annie Matrix: A Tool to Identify Breakout Companies
2. The App Annie Matrix
Introduction
The App Annie Matrix is a framework, based on our ​Store Intelligence ​product and ​DNA
categorization model​, to help capture the momentum of breakout performers in the app
economy. It plots the rank of the top 150 companies, by trailing revenue or downloads,
against growth. The resulting scatter plot is divided into four quadrants as shown below.
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The App Annie Matrix: A Tool to Identify Breakout Companies
High­potential companies are then identified by taking into account both their position and
direction of movement over time on the Matrix. Our methodology can pick up small
movements early in an app’s lifecycle while also reducing the impact of one­time spikes. It is
also very versatile since it is built on top of App Annie’s market data products and, therefore,
can be used to drill down into any given set of categories or countries.
It is important to point out that this is not meant to make guaranteed predictions, but provide
directional input to whittle down the consideration set of high­potential players from hundreds
to a mere handful. In other words, it purely serves as an early identification system for deeper
due diligence on App Annie’s ​Store Intelligence ​and ​Usage Intelligence ​platforms.
The sub­sections below highlight companies that have seen major moves on the App Annie
Matrix in Q1 2015.
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The App Annie Matrix: A Tool to Identify Breakout Companies
App Annie Matrix for Worldwide Application Downloads
iOS and Google Play Combined ­ Q1 2015
Lazy Swipe ​contributed to Woody’s surge, while Budge was fueled by growth across its
portfolio of kids entertainment apps.
Utility developer, Woody, and kids­focused developer, Budge, were two of the biggest movers
in Q1 2015 on the App Annie Matrix for worldwide Application downloads. Woody initially
appeared on the Matrix as a Rising Star in January 2015 and has since seen spectacular
growth thanks to ​Lazy Swipe​, an app that gives users easy access to recently used apps,
notifications and settings. Meanwhile, Budge surged into the Rising Stars quadrant thanks to
broad­based growth across its portfolio of kids­focused entertainment apps.

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The App Annie Matrix: A Tool to Identify Breakout Companies
App Annie Matrix for Worldwide Game Downloads
iOS and Google Play Combined ­ Q1 2015
General Adaptive Apps’ “super casual” title, ​aa​, drove its spurt while Budge’s portfolio of kids
games drove its repeat performance.
The App Annie Matrix for worldwide Game downloads was highlighted by Australian
developer, General Adaptive Apps, and a second appearance from Budge. After making its
initial appearance on the Matrix in January 2015, General Adaptive Apps rode the success of
its super casual title, ​aa​, to become a Superstar on the Matrix. Meanwhile, Budge again saw
growth across its portfolio of kids­focused games which drove its successful Superstar push.

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The App Annie Matrix: A Tool to Identify Breakout Companies
App Annie Matrix for Worldwide Game Revenue
iOS and Google Play Combined ­ Q1 2015
Plarium Global rode strategy game ​Total Domination Reborn ​to success, while Product
Madness relied on its portfolio of casino games.
In Q1 2015, game developers Plarium Global and Product Madness saw two of the biggest
jumps on the App Annie Matrix, by worldwide Game revenue, and are now on the verge of
becoming Superstars. Plarium Global’s surge was driven by its ​focus on the strategy genre
with games like ​Total Domination Reborn​ and ​Stormfall: Rise of Balur​. Meanwhile, Product
Madness’ surge was caused by the performance of its casino gaming titles, a ​genre that has
monetized very well​ in the past.

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The App Annie Matrix: A Tool to Identify Breakout Companies
3. Historical Case Studies
In order to demonstrate the efficacy of the App Annie Matrix, we have also performed a
retrospective analysis covering worldwide data for Games or Applications from January 2014
to March 2015. The case studies listed in this section highlight companies that were “Rising
Stars” on the App Annie Matrix in the past. Unlike the three­month Matrix snapshots shown in
the previous section, these case studies show the change in Matrix position of companies
over a longer period of time.
Etermax
Etermax, the company behind the smash hit game ​Trivia Crack​, first appeared on the App
Annie Matrix (for Worldwide Game Downloads on iOS and Google play combined) in April
2014. Interestingly, ​Trivia Crack​’s initial success was not a function of its popularity in the US,
but rather in Latin America where Etermax is headquartered.
Click the image above to play the full­size video (will launch an external window).
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The App Annie Matrix: A Tool to Identify Breakout Companies
As we can see in the motion chart above, ​Trivia Crack​’s early success in Latin America
helped it make an appearance on the App Annie Matrix as a Rising Star in April 2014. But it
wasn’t until the holiday season in 2014 when ​Trivia Crack​ went viral in the US, which also
helped the game top ​App Annie's Games Index​ in December 2014. ​Etermax surmised​ ​that
Trivia Crack ​was able to leverage its initial base of Latin American users to enter the US
market, thanks to the size of the Hispanic community in the country. Of course, ​Trivia Crack​’s
popularity now crosses geographic and cultural boundaries, but it is interesting to note that its
success was most likely a function of the social elements built into the game ­­ elements that
existed in April 2014.
ContextLogic
ContextLogic, a data­driven e­commerce startup, was founded in 2011 by former Google and
Yahoo! employees. The company’s app, ​Wish​, was launched in mid­2012, but it did not gain
much traction on iOS and Google Play at first. However, a strong start to 2014 helped
ContextLogic make its first appearance on the App Annie Matrix (for Worldwide Application
Downloads on iOS and Google play combined).
Click the image above to play the full­size video (will launch an external window).
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The App Annie Matrix: A Tool to Identify Breakout Companies
Unlike most e­commerce apps, ​Wish​ shows users a Pinterest­like feed of products which is
continually personalized for each user based on their actions (buying or saving specific
products) and social graph. ContextLogic’s integration of social and engagement data paid
off, as its performance helped it enter the Rising Star quadrant on the App Annie Matrix in
January 2014. Since then, ContextLogic raised ​$19 million​ in Series B funding in April 2014,
giving its marketing efforts a boost. Just two months later, in June 2014, ContextLogic landed
another ​$50 million​ round of funding, this time at a valuation of about $400 million. Following
this funding, ContextLogic continued its growth to become a Superstar on the App Annie
Matrix in September 2014 and has stayed there since. It certainly seems like ContextLogic
has the potential to become the next “billion dollar unicorn.”
Sankuai
Another e­commerce company, this time from China, also made waves on the Matrix.
Sankuai (北京三快科技有限公司) is not a very well­known name among consumers or even in
technology circles in China. But its flagship service, Meituan (美团), is one of China’s leading
e­commerce services on both desktop and mobile. Launched in 2010, Meituan began as a
Groupon­like group discount service and gradually grew into a comprehensive online deal
marketplace for local services. The company’s flagship app, ​Meituan​, was launched in 2011
but saw limited traction until mid­2013. Its subsequent performance then helped Sankuai
make its first appearance on the App Annie Matrix (for Worldwide Application Downloads on
iOS and Google play combined).
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The App Annie Matrix: A Tool to Identify Breakout Companies
Click the image above to play the full­size video (will launch an external window).
Sankuai’s recent mobile success certainly seemed to pique investor interest as its January
2014 debut on the App Annie Matrix was followed by a ​$300 million​ Series C funding round in
May 2014. This cash infusion supercharged its growth as it vaulted into the Superstar
quadrant just a few months later, in August 2014, where it has remained. Sankuai’s staying
power appears to have boosted investor confidence even further as it raised a ​$700 million
funding round in January 2015, at a staggering $7 billion valuation.
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The App Annie Matrix: A Tool to Identify Breakout Companies
About App Annie
App Annie is the largest mobile app intelligence platform, providing developers and publishers
with a 360­degree view of what they need to know to build, market and invest in their apps.
App Annie is used by over 800,000 apps to track their performance, and over 400,000 mobile
app professionals ­ including 94 percent of the top 100 publishers ­ rely on App Annie to
inform their business decisions, including Electronic Arts, Google, LinkedIn, Line, Microsoft,
Nexon, Nestle, Samsung, Tencent, Bandai Namco, Universal Studios and Dow Jones. App
Annie is a privately held global company headquartered in San Francisco with 12 global
offices in cities including Amsterdam, Beijing, London, New York, Seoul and Tokyo. The
company has raised $94 million in funding from e.Ventures, Greycroft Partners, IDG Capital
Partners, Institutional Venture Partners and Sequoia Capital. For more information, please
visit:​ ​www.appannie.com​ or follow App Annie on Twitter: ​@appannie​.
Report methodology and updates are available ​here​.
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