Marketplace Apps Annual Report 2025

The popularity of the Marketplace Apps sector among consumers had a ripple effect on B2B and enterprise application marketplaces, like Salesforce, which have seen equally tremendous growth in the last decade. Learn which tools are the most in demand in the Marketplace Apps Winter 2025 Report.

MARKETPLACE APPS

ANNUAL REPORT

2025

Index

Macroeconomic Overview

Industry Overview

Market Breakdown

Enterprise Apps Overview

M&A Activity

Select FE International Transactions

Marketplace Apps Funding

Looking Ahead

Behind this Report

About FE International

Macroeconomic Overview

A New Year, a New Hope

Real GDP Growth (% YoY)

Global economic outlook is more hopeful for 2025. Cabinet changes across several of the G20 and accommodative monetary policies signal greater potential for growth across markets and industries. The incoming US Presidential Administration heavily influences the global macroeconomic outlook for 2025. The election of Donald Trump in the US is widely expected to improve the economic and regulatory landscape for business owners. In the international arena, President-elect Trump’s trade policies will likely focus on attempting to solidify U.S. dominance in areas such as digital technology and artificial intelligence, broadly benefitting the tech industry as a role. US President-Elect Trump's generally pro-business stance is encouraging to global markets. The new administration's proposed tax policies could lead to substantial changes in the US economy and its partners. Tax cuts, particularly for corporations and high-income earners, might stimulate investment and economic activity. While global financial markets are especially poised for a potentially transformative period, across- the-board tariffs from the US would be unusual — the impact on the global economy could be considerable. However, the potential imposition of tariffs is more likely the starting point of negotiations. Worldwide GDP is forecast to expand 3.0% next year, slightly below prior estimates. The UK and EU are expected to continue to struggle with growth but could be impacted positively by events in the U.S. In China, growth is expected below the official 5% target for the year. For the U.S., there is no consensus, and forecasts are being reconsidered at this writing. Goldman Sachs and UBS forecast 2025 U.S. GDP growth at 2.7-2.9%. The U.S. economy could initially grow slightly faster under Trump's plans to cut corporate taxes, but that impact could quickly fade depending on the effects of a tariff conflict. The Conference Board’s Consumer Confidence Index rose to 111.7 in November 2024, an increase of 2.1 points from October and the highest level since July 2023. This likely reflects increased consumer optimism following the U.S. presidential election and more positive assessments of the current labor market.

4.8%

4.1%

3.3%

3.0%

2.9%

2.7%

1.5%

1.2%

0.9%

0.8%

24E 25E

24E 25E Euro Zone

24E 25E

China

World

Consumer Confidence Index (%)

Index, 1985 = 100

140

Recent uptick in Consumer Confidence

130

120

111.7

110

100

2020

2021

2022

2023

2024

2025

Source: S&P Global Economic Research and The Conference Board.

The Lower Middle Market: A Hidden Gem for M&A Central banks worldwide have continued a gradual reduction in policy rates, which is expected to greatly benefit M&A activity through 2025. The lower-interest-rate environment benefits sellers by making deals more affordable and attractive. Lower borrowing costs translate to reduced debt, quicker deal timelines, and less complex financing structures. Sellers may be able to negotiate for larger upfront payments and fewer deferred payments or earn-outs, as lower borrowing costs reduce the need for such complex arrangements.

The recent interest rate cuts are encouraging for buyers and sellers alike, especially as capital deployment becomes a priority at year end. The [US] Fed didn’t commit to a timeline for the next cut, possibly a signal of caution with policy shifts from the new US administration. Inflation is still “somewhat elevated," so they are walking a tightrope. Powell’s challenge? Balancing a cooling labor market with inflation control. For business owners, this could mean opportunity in the months ahead.

Thomas Smale CEO of FE International

The underlying technology and platform primarily drive lower middle market deals. Lower middle market deals valued under $100 million often require less financing, making them less sensitive to interest rate fluctuations, but lower rates can lead to even more favorable terms and increased deal activity. Importantly, overall economic optimism and a pro-business environment can lead to increased deal activity, especially in the lower middle market. For instance, the US President- elect has expressed plans to deregulate the financial industry and emphasizes technology solutions for financial transactions, which portends well for increased deal activity.

Interest Rate (%)

Rate cuts by Central banks

Quote from Randal The true driver of success in lower middle market technology deals lies in the underlying technology. In sectors like FinTech, where innovation is paramount, the ability to acquire and deploy transformative technologies will ultimately determine deal outcomes. Additionally, a pro-business environment can, on the margin, prompt more transactions to be considered and pursued.

4.38% 3.40% 4.75%

1.00%

Randal Stephenson Head of Investment Banking of FE International & CEO of FE Capital Markets LLC 1

Jan-22

Sep-22

Jun-23

Mar-24

Dec-24

US (Fed)

Euro Area (ECB)

United Kingdom (BoE)

Switzerland (SNB policy rate)

Source: Interest rates as per central bank data of respective regions. Note: ECB = European Central Bank, BoE = Bank of England, SNB = Swiss National Bank. (1) Securities transactions offered and managed through FE Capital Markets LLC, Member FINRA/SIPC (FINRA CRD# 314943).

Venture Capital & Private Equity Investment Outlook

VC Dry Powder ($B) by Vintage

PE Dry Powder ($B) by Vintage

$800 B

$1,800 B

$1,600 B

$700 B

$1,400 B

2024 2023 2022 2021 2020 2019 2018 2017 2016

$600 B

2024 2023 2022 2021 2020 2019 2018 2017 2016

$1,200 B

$500 B

$1,000 B

$400 B

$800 B

$300 B

$600 B

$200 B

$400 B

$100 B

$200 B

$0 B

2014 2015 2016 2017 2018 2019 2020 2021

2022 2023 2024

2014 2015 2016 2017 2018 2019 2020 2021

2022 2023 2024

• Venture capital fundraising in 2024 exceeded 2023 levels. Private equity fundraising, while anticipated to be lower due to higher interest rates, still surpassed $500 billion. • VC and PE firms hold approximately $650 billion and $1.4 trillion of dry powder, respectively. Favorable market conditions should create a favorable environment for robust M&A activity across sectors.

• M&A activity could surpass 10-year averages as US President-elect Donald Trump's pro-growth policies, lower corporate taxes, and expected deregulation are anticipated to create a deal-making surge in 2025, according to Goldman Sachs CEO David Solomon.

Source: Pitchbook Q3 2024 Global Private Market Fundraising Report and NY Post, 10 December 2024.

Marketplace Apps Industry Overview

The State of Marketplace Apps Mobile internet accounts for nearly 63% of global traffic. Smartphone domination prompted a new generation of digital customers and workers alike, who demand flexible solutions for their unique needs — and that’s why apps became so popular. Of course, apps and their marketplaces span beyond mobile — this market model has become the standard for desktop users as well. The Marketplace Apps sector contains both the application marketplaces, like Salesforce or the Apple App Store, as well as the in-house and third-party software tools available within those marketplaces. For example, a checkout tool for Shopify, a cloud storage plugin for Amazon Web Services, or a payment processing service for Etsy. The popularity of these markets among consumers had a ripple effect on B2B and enterprise application marketplaces, like Salesforce, which have seen equally tremendous growth in the last decade. Both app marketplaces and the apps they host have blossomed into unique, deeply-interconnected economic powerhouses. The sector has attracted considerable interest from major corporations and financial institutions, who are strategically acquiring multiple applications within an ecosystem in order to leverage their combined capabilities across various platforms. By doing so, they can capitalize on synergies, enhance operational efficiencies, and achieve scalability across the board. This comprehensive approach not only maximizes their investment potential but also fosters innovation and growth within the evergreen sector.

Source: Statista 2024.

Global Application Market to Double by 2030 The global mobile application market size was $254.9 billion in 2024 and is projected to grow at a CAGR of 14.3% from 2024 to 2030 to $567.2 billion — more than double. This includes applications across various sectors, like retail, health and fitness, gaming, music and entertainment, and social networking. Smartphone adoption is becoming universal. Internet usage is becoming more accessible. And so, the marketplace apps industry cements itself as indispensable. With the increased integration of AI technologies in mobile apps, we're seeing the emergence of previously unseen opportunities in operational efficiencies from automated storefronts to dynamically, instantly generated content. These fundamental changes continue to propel the market. Businesses have responded by improving their online presence through user-friendly mobile apps and robust digital marketing strategies made to accommodate the on-the-go customer.

Global Mobile Application Market Size

(In Billions of USD)

CAGR 14.3%

567.2

254.9

2024E

2030F

Source: Statista 2024

AI x Marketplace Apps

With AI trickling into every aspect of business, marketplace apps have started to see the impact too. Some of the ways in which AI will impact the functions of marketplaces and apps is:

• Enhanced personalization: Leveraging machine learning and advanced algorithms, app developers will learn user behaviors and preferences and create more appealing apps.

• Smarter User Interfaces: Marketplaces are working towards adding more attractive features to standout for example using voice assistances like Siri or Alexa.

• Customer Support: Routine queries or repetitive complaints can be taken care off by AI to reduce operational costs and boost efficiency.

Digital marketplace sector is experiencing a transformation with introduction of AI. By harnessing the true potential of AI, apps can solve personal problems of users in a creative way. AI will play a significant role in shaping the future of marketplaces.

Source: Statista 2024.

Regulatory News

In 2024, digital marketplaces were subject to several new regulations : • Digital Markets Act (DMA): This EU legislation designates large online platforms as "digital gatekeepers" based on their size and market impact. These gatekeepers, including Alphabet, Amazon, and Meta, must adhere to rules ensuring fair competition, such as prohibiting unfair practices and ensuring data access and portability. The DMA also empowers the European Commission to investigate and impose fines for non-compliance. • California Privacy Protection Agency (CPPA) Regulations: The CPPA drafted new regulations for automated decision-making technology (ADMT) under the California Consumer Privacy Act (CCPA). These regulations require businesses to notify consumers about the use of ADMT and allow them to opt-out of certain automated processes. • Organisation for Economic Development (OECD) Reporting Rules: From January 1, 2024, OECD rules mandate online marketplaces to report details and income of sellers, aiming to enhance transparency and tax compliance. This includes collecting information about sellers' transactions and reporting them annually. • Cybersecurity and Privacy: US federal and state laws continue to evolve, requiring digital marketplaces to implement robust cybersecurity measures. This includes adhering to the "reasonable security" standard and complying with specific regulations like the Gramm-Leach-Bliley Act for financial institutions and HIPAA for healthcare entities.

Source: Skadden, ICLG, Android Central, ICAEW 2024

Regulatory News • SEC AI Rules: The US Securities and Exchange Commission (SEC) has proposed new rules addressing conflicts of interest related to the use of AI by broker-dealers and investment advisers. These rules, expected to be finalized in 2024, aim to ensure transparency and fairness in AI-driven financial services. • App Privacy: All app developers are subject to general prevailing privacy best practices like data privacy, restriction on sharing of personal data and use of third-party partners. App developers should be aware of handling personal and confidential data. The Federal Trade Commission Act applies to mobile apps and devices to protect consumers and address unfair trade practices and privacy concerns, • Other Legal Requirements: The legal landscape can vary depending on the category of the app. For instance, apps in the healthcare space are subject to Health Insurance Portability and Accountability Act (HIPAA) while apps in the financial landscape are subject to Anti Money Laundering (AML) regulations. Therefore, one must pay attention to granular legal compliance. These regulations reflect a global trend towards tighter controls on digital marketplaces, aiming to enhance competition, transparency, and consumer protection.

Marketplace Apps Market Breakdown

Consumer Marketplaces

Top 5 Players

Dominating Global Markets

Apple App Store 1,727,204 apps

App Developers

Apps

Google, Meta, Microsoft, WhatsApp, Motorola Mobility

Amazon Prime Video, TikTok, Filto, WhatsApp, CashApp

United States

Google Play 3,612,796 apps

Xiaomi, Huawei Internet Services, Shalltry Group, UCWeb, Mi Music

China

Twitter, Telegram, YouTube, Instagram, Google

Amazon Appstore 778,654 apps

Samsung, Smart Media4U Technology, Jio Platforms Limited, Truecaller, Airtel

India

Flipkart, Meesho, Amazon, Instagram, Shopsy

Amazon FireTV 16,376 apps

ASDA Rewards, McDonald’s, Google Wallet, Disney+, Microsoft Teams

United Kingdom SwiftKey, Badoo, Wasabi, IMDb, Piriform

SoundCloud, upday GmbH & Co., TeaCapps, RARLAB, TeamViewer

TikTok, PENNY Angebote & Coupons, VR Banking - Deine mobile Bank, Takko Friends, PayPal

Germany

Apple TV OS App Store 19,298 apps

Source: 42matters.

Applications Market Value by Segment

(In Billions of USD)

1000

900

781.7

800

732.2

683.0

700

633.7

585.7

600

535.9

458.5

500

437.8

416.1

400

328.7

300

268.1

215.2

200

167.6

100

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

Social Networking Entertainment

Shopping News&Magazines

Photo & Video Navigation Others

Total

Source: Vlinkinfo

Average Revenue per Download

(In USD)

Business

Medical

News & Magazines

Social Networking

Shopping

32.12

31.14

27.18

27.01

26.19

25.82

25.76

24.32

26.62

22.8

21.46

20.97

19.87

11.78

11.73

11.32

11.22

11.09

10.96

9.95

9.71

9.05

9.01

7.16

9.98

2.96 9.88

9.58

9.49

2.76 9.49

3.77 9.00

7.24

8.9

5.99

0.76 2021 2.77 7.64

8.28

2.68 7.71

3.72

3.01

2.95

2.91

2.86

2.81

2.8

2.7

1.14

1.06

1.01

0.86 2027

0.85 2026

0.83 2025

0.82

0.81

0.79

0.78

0.74

2017

2018

2019

2020

2022

2023

2024

2028

2029

30% of the total revenue in the sector comes from shopping applications. This substantial contribution showcases the critical importance of ecommerce within the digital economy. Consequently, there has been a marked increase in the development and deployment of ecommerce-oriented marketplace apps. These applications encompass a broad spectrum of functionalities, from advanced marketing analytics solutions to sophisticated inventory management software, catering to the diverse needs of online retailers.

Source: Statistica 2024.

Enterprise Apps

State of Enterprise Apps Enterprise apps, which are primarily designed for corporate use, are a subset of the overall app market. The enterprise apps industry was valued $320.4 billion in 2024 and projected to grow to $626 billion by 2030 representing. a CAGR of 11.8%. Enterprise App Categories: Business Applications: ERP, CRM, HCM, and other enterprise software. Development Tools: Tools for application development, integration, and DevOps. Security: Security solutions to protect applications and data. Infrastructure: Applications for managing and optimizing cloud infrastructure. Analytics: Data analysis, business intelligence, and reporting tools. Growth Drivers in the Market: A customer-centric approach: Apps that prioritize end-user needs and offer personalized solutions tend to yield greater returns.. Automation and eliminating inefficiencies: Automation enhances operations and reduces errors, boosting profit margins. Automated enterprises are also better equipped to adapt to the dynamic global marketplace. Global Operations: As international trade becomes more accessible, businesses are expanding across geographies. This drives demand for apps that enable seamless, 24/7 business functions, along with centralized monitoring and reporting systems.

Enterprise Apps Future Growth

(In Billions of USD)

560

551

526

514

501

448

401

358

320

295

2023 2024 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F

Source: Allied Market Research, IMARC Group

The Evolution of Enterprise Marketplaces A timeline of marketplace launches and expansions

CrowdStrike Store

Atlassian Marketplace

Slack App Directory

Zapier App Integration

ServiceNow Store

Stripe App Marketplace

Salesforce AppExchange

Shopify App Store

AWS Marketplace

Microsoft AppSource

Okta Integration Network

GPT Store

Azure Marketplace

Auth0 Marketplace Snowflake Marketplace

Zoom App Marketplace

PANW Cortex Marketplace

2005 2006 2007 2008 2009 2010 2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

2022 2023

Extend core Product

Integrate with other products

Serve as core product functionality

Provide ecommerce experience

Source: Okta.

ChatGPT Store OpenAI recently launched the GPT Store, marking a significant innovation in the app marketplace space. The GPT Store serves as a platform where applications built on ChatGPT technology can be listed and shared. It enables non-developer users to create their own applications, known as GPTs, and make them available in the marketplace. The store operates on a revenue-sharing model, incentivizing independent developers to create and publish apps, thus fostering a diverse range of applications. Available to ChatGPT Plus, Team, and Enterprise users, the GPT Store will feature apps across various categories, including DALL.E, research, programming, process automation, customer support, data analysis, lifestyle, health, and education. Launched in November 2023, the GPT Store already hosts 3 million custom GPTs, surpassing the Apple App Store, which, since its debut in 2008, has accumulated nearly 2 million apps. This rapid growth highlights the GPT Store's potential as a revolutionary platform. The GPT Store also offers individuals without coding skills the opportunity to generate passive income, making it a groundbreaking development in the tech space. Initially launched in the USA, the store will feature a revenue- sharing rate between 10% and 20%, which is lower than traditional app marketplaces. This initiative empowers users with coding-like capabilities, placing them at the forefront of the tech industry.

Source: Salesforce.

Mapping Enterprise Marketplaces

Target audience

Number of apps listed

App categories

Platform founded date

Blogging consumers to large businesses and even ecommerce sites Businesses of all sizes, but it tends to be used by small to medium-sized corporations Business owners, marketing, and digital Large enterprises across sectors. Sales, marketing, customer service, finance and HR Customer-facing roles, such as customer service, customer success, and community management

70,000+ plugins available for WordPress

Marketing, ecommerce, events, media, design elements, communication, and content

2003

1,000+ apps available on Zoho Marketplace

CRM, recruitment, sales, analytics, projects, campaigns, inventory, invoicing, and more

2005

300+ apps, including social media and design tools

Marketing, ecommerce, services & events, media & content, design elements, communication

2006

7,000+ Salesforce-native and third-party apps

Salesforce has 150,000 and 91% of its customers use AppExchange apps

2006

Productivity & time-tracking, ecommerce & CRM, analytics & reporting, email & social media, marketing & lead generation, quoting & billing, and more Customer support, payments & security, marketing, accounting & finance, shipping & fulfillment, site optimization Themes, payment solutions, marketing, customer service, merchandising, and more Finding products, orders & shipping, marketing & conversion, selling & products, store design, and store management

1,200+ apps are available

2007

1000+ apps, including payment gateways, shipping providers, marketing tools, and more 5000+ apps like marketing and payment tools

Mid-large-sized ecommerce businesses

2008

WordPress developers and agencies that build ecommerce sites for clients

2008

8,000+ apps and integrations on its marketplace

Small merchants through to large enterprises

2009

Source: Wpzoom.

Mapping Enterprise Marketplaces (cont.)

Target audience

Number of apps listed

App categories

Platform founded date

1000+ apps – like marketing tools, accounting software, and fulfillment services

Ecommerce enterprises, business owners, founders, and marketing

Accounting, analytics, B2B/wholesale, catalog/order management,

2009

Accounting & invoicing, analytics, bots & messaging, contacts & calendar sync, customer support, data management, email marketing, marketing automation – and more

Small to medium-sized businesses. Sales and marketing

400+ apps – free and paid.

2010

200+ apps Google Analytics, Salesforce, and GitHub. 100+ apps in its marketplace. anti-fraud, analytics, and accounting

Insights, performance, security, special & communication, UI & design, and widgets & plugins

Businesses of all sizes. Technical

2010

Ecommerce businesses and mobile payment clients

Accounting, billing, climate, compliance, data & analytics, financial services, marketing & sales, and productivity

2011

Admin tools, CRM, dashboard gadgets, project management, charts & diagramming, design tools, messaging, IT & helpdesk, and more CRM, marketing, project management, software development, team management, productivity & efficiency, reporting & analytics, and more

Customer management and project management

5,300+ apps – free and paid

2012

Marketing, product management, business owners, and HR teams

250+ apps – free and paid

2014

800+ apps on its app marketplace

Analytics, intelligence and reporting, automation, customer service and more

Medium to larger-sized businesses

2015

Factors Driving Valuations

Multiple

Age

Time

Trends

EBITDA Margin

Reviews

>3 years

< 5 hrs/week

Growing

➢ 50%

➢ 1000

<2 years

> 15 hrs/week

Flat

< 30%

< 500

Established applications, consistent growth, low operational cost, solutions for niche customer demands – these are the values driving strategic acquisitions and PE interest. Buyers will want to see the following:

• Solid user metrics, like high engagement and consistent session intervals • High retention and relatively low customer churn • Guaranteed in-house product development team

• Popularity, demonstrated by high review quality and growing volume • Strong revenue streams and stable cash flows • Niche solutions and overall uniqueness within the enterprise ecosystem

Source: FE Internal Analysis, Eqvista

Marketplace Apps M&A Activity

USD Mn

Select FE Advised Deals

6.9%

Salesforce Payment Solution

Sold to

17.2%

B2B SaaS Shopify App

2024

Sold to

10.3%

iOS Data Privacy App

65.5%

Sold to

22 21

20242824 14 257538 8 17

Q2 Q3 Q4 Q1

Q2 Q3 Q4

B2B SaaS Shopify App

2022

2023

2024

Sold to

<25Mn 25Mn to 50Mn 50Mn to 100Mn 100Mn and above

Average Deal Value

Count

• Deals valued under $25M continued to drive M&A activity in this sector with ~66% of the total deals in 2024 under $25M. • Although the total number of deals in this space has decreased over the years, the industry is poised for growth, driven by anticipated lower interest rates, renewed interest in application development fueled by growing business needs, and emerging trends such as AI, blockchain, and virtual reality.

• The average deal value over the quarters since 2022 ranges between $8M to $38M (bearing Q1 2024) which fits well in the lower middle market - where FE International specializes. • The average deal value in Q1 2024 was higher than the previous quarters because of the acquisition of an app-based e-mobility solutions company.

Source: Pitchbook as of 31 December 2024.

Select Lower Middle Market M&A Deals

Deal Size ($M)

Target

Buyer

Date

Target

Buyer

Date

01-Mar-24

05-Aug-24

5.2

17-Apr-24

7.5

12-Aug-24

09-Aug-24

12-Sep-24

26-Jan-24

6.9

01-Jun-24

0.9

Appirits

05-Nov-24

5.3

20-Jun-24

0.1

Delivered

Source: Appsruntheworld and Pitchbook as of 31 December 2024.

Select FE International Marketplace Apps Transactions

Finding the Right Buyer in a Niche Sector Asperato, a Salesforce payment orchestration solution, finds new home with Salesforce focused private equity firm

Company Overview:

Sold to

Asperato is an embedded Salesforce payment orchestration solution with a gross merchandise value (GMV) run rate of over $1.1 billion. The company helps businesses securely collect and process payments around the world with its fully tokenized PCI-DSS Level 1 compliant solutions, which have been audited and certified to meet the highest standards of security. Asperato partnered with FE International due to the firm's unmatched presence in the Salesforce ecosystem, with over a dozen completed transactions such as CloudOrca and Focus on Force.

Salesforce Payment Solution

Key Value Drivers:

Buyer Interest:

Process Results:

• Revenue has grown 33% year over year between 2021-2022 • 87% gross margins • Net revenue retention of 111% (2022)

• Opportunity presented to 1200+ buyers with the majority of outreach focused on strategic acquirers within FinTech and beyond.

• FE negotiated favorable management incentive structures in which founders receive future payouts for consistent results — in addition to funds received for the sale of the business • 7 Offers that each exceeded sellers’ expectations

One Perfect Buyer Leads to a Done Deal FE International knew exactly who to contact for Website on Demand to have a successful acquisition

Company Overview:

Sold to

Website on Demand is a leading provider of tailored digital solutions, specializing in website design and development. With a commitment to creativity and functionality, they offer customizable services to meet the unique needs of businesses across various industries. Website on Demand wanted a quick process and preferred cash up front. That's why they partnered with FE International, a leading Shopify App advisor with dozens of transactions completed in the space. Given both the tight timeline and the firm's presence, the ideal buyer was identified immediately – and made a perfect offer right out of the gate.

B2B SaaS Shopify Apps

Key Value Drivers:

Buyer Interest:

Process Results:

• 3 well-established Shopify apps with the ability to cross sell their feature sets • Top ratings and high number of reviews, representing an established foothold within the Shopify B2B applications • Large active customer base with potential for growth

• Exclusive process with just one buyer contacted, a key Shopify-focused PE firm • Offer received exceeded founders' expectations • Have even sold to Shopify themselves • Have completed well over 150 Shopify related app deals

• FE International ran a private sale with just one buyer due to established relationships within the Shopify ecosystem, showcasing the integrity of the firm's relationships in key sectors • Cash upfront far exceeded management's expectations

iOS Aggregator Preempts Data Privacy Deal FE International creates competitive tension for Lockdown Privacy

Company Overview:

Sold to

Lockdown Privacy is a trusted online resource dedicated to empowering individuals with essential knowledge and tools to enhance their digital security and privacy. Through expert guides, reviews, and practical tips the company help users navigate the complexities of online privacy, ensuring they can safeguard their personal information effectively. The founder came to FE International following the announcement that iCloud enabled apps would be permitted to transfer IP, given that the firm has dozens of transactions in the app space. While the process ended with 6 unique bids, the buyer held down the deal from the start with a pre-empted, maximized offer.

iOS App Data Privacy

Key Value Drivers:

Buyer Interest:

Process Results:

• 70% Revenue CAGR (2017-2021) • Top rating on iOS and Android with an average rating of 4.4/5-stars • Over 426K installs over the LTM

• 150 Parties Contacted • 6 Competitive bids • 1 offer received ahead of an LOI deadline from a private iOS app aggregator

• 6 Competitive bids - predominantly strategic - driven by increasing data privacy concerns among users • 1 party pre-empted the process with an offer that maximized the founders desired outcome for structure and a quick close

Selective Search, Successful Acquisition FE International curated a list of buyers for Stocky - leading to its acquisition by Shopify

Company Overview:

Sold to

Stocky delivers a comprehensive platform for businesses looking to optimize their inventory management using Shopify POS Pro. Boasting an array of powerful tools, from creating and managing purchase orders to seamless communication with suppliers, Stocky ensures efficient and strategic stock handling. FE International led Stocky in a highly competitive process because of the firm's experience in the marketplace apps space. The process resulted in its acquisition by Shopify, which plans to integrate the tools to make its in-house offerings more robust.

NYSE: SHOP

B2B SaaS Shopify App Inventory Management

Key Value Drivers:

Buyer Interest:

Process Results:

• Impressive reach within a vast addressable target market comprising hundreds of thousands of potential users • Consistent revenue acceleration observed over the past three years. • Outstanding product reputation underlined by stellar user reviews and top-tier ratings • Operational prowess demonstrated by lean processes, facilitating enviable high margins

• 150 Parties Contacted

• 5 offers received, all from strategics

• FE International garnered significant attention from strategic entities. • This led to 5 competitive bids for the company, ensuring not only the perfect buyer but also 2 additional

backup offers, showcasing our commitment to exceeding client expectations

Marketplace Apps Funding

USD Mn

Funded

24.5%

240

206 207

170

151

Series A+

9.0%

136

121

117

Series B+

6.0%

2,213

1,337

1,541

805

1,103

717

349

776

1,109

703

958

486

Series C+

4.7%

Q2 Q3 Q4 Q1

Q2 Q3 Q4

2022

2023

2024

Total deal size

Deal Count

The funding funnel shows that, out of the total B2B marketplaces, only 24.5% of the companies are funded. With every level of funding round the number of successful marketplaces decrease. Eventually only 4.7% of the marketplaces get Series C funding. With the reduction in interest rates, the total 2024 funding increased by 20.6% as compared to 2023.

• In 2024, the apps and app development companies raised a total of $3,257M across 352 deals. • Q1 of 2024 saw the highest number of deals i.e., 117. • Reduction in interest rates has improved the funding landscape in the apps space. While the overall funding volume has reduced over the years, it is anticipated that the emerging trends will re incentivize the investors to invest in this sector.

Source: Tracxn and Pitchbook as of 31 December 2024.

Looking Ahead

The marketplace apps sector has demonstrated remarkable growth, drawing sustained interest from multinational strategic acquirers, private equity, and prominent venture capital firms alike. Central to this optimism are overarching consumer trends that prioritize convenience and personalization coupled with corporate strategies aimed at enhancing efficiency and sustainability. Other factors that will shape the landscape of marketplace apps in 2025 include: • Augmented Reality – Augmented reality will enable consumers to engage in interactive experiences before purchasing a product or service. This technology can facilitate virtual demos and trials, thereby ensuring customer satisfaction. • Voice Commerce – Marketplace apps can leverage voice recognition to revolutionize the way users can access their platforms. It can assist in browsing, searching and purchasing any product or service. • Artificial Intelligence – AI-driven applications like chatbots and recommendation algorithms can simplify the decision- making process for users, ensuring increased customer satisfaction. • White Label Solutions – White Labeling is one of the leading solutions for enterprises interested in launching new products without needing to create a software from scratch. Therefore, many companies are looking to develop a comprehensive marketplace providing such software solutions. The alignment of these consumer and corporate trends creates a fertile environment for the continued growth of the marketplace apps sector. Strategic acquirers recognize the potential for market expansion through the acquisition of high-performing apps, while private equity and venture capital firms are eager to capitalize on the sector's promising returns through the consolidation of competing tools through roll-ups and add-ons. With decades of experience, FE International assists founders in optimizing operations, crafting compelling investor narratives, and navigating the complex M&A process.

Behind this Report