Aprenita: loans to developers up to $500 thousand

Hi! Before getting to the point, I can’t help but ask the question that torments me: what does Aprenita mean, why did you choose such a name?

Sergey Kovalenko

Hi! When choosing a name, we had several options, but we wanted to choose something sonorous and beautiful. We experimented around the word “App”, and so “Aprenita” was born.

Let’s get closer to the topic. The core of your business is targeted loans and factoring. What is the focus more on now?

We offer two products that solve a similar problem: they give proximity to money and the opportunity to use funds for a specific purpose, whether it’s marketing or portfolio improvement.

Factoring is a more affordable product, so we offer it to everyone who is interested in it.

However, in order to get a loan, you need to pass a certain qualification. Targeted loans are primarily designed for more mature companies. It turns out that if we are talking about loans directly for marketing, then the company should be mature enough and with some experience so that people understand, first of all, how additional money can help with scaling. It is important to be able to evaluate your own effectiveness.

For our part, we are actively promoting loans.

Do I understand you correctly that in both cases, both in factoring and in targeted loans, the emphasis is on the fact that it will be spent on marketing? That is, it is clear that with factoring it goes without saying, since that is what money is taken for. But when I asked about targeted loans, it seemed to me that a small studio with a finished product or even with an incomplete product could take a loan. Or do you only need a finished product?

Let me explain. We do not limit what and how the money will be spent, but the focus client for us is the company that has a portfolio of applications, which has done trial marketing and understands that an increase in marketing costs by one and a half, two or three times will really lead to an increase in the right users in a particular application or in the portfolio as a whole.

If we say that we need money to create and develop one game, then, of course, everything is different here. In this case, a different type of money is needed – more “long” money, such that you do not need to return and repay monthly.

If a company has been in business for some time, then a fairly large percentage of the entire budget falls on marketing expenses. It is clear that we need constant improvements to the application, new levels, refinement, perhaps changes in the game itself somewhere, but the product must be on the market. This is important for the loan. This is the main difference between angelic, venture capital investment and lending. That money can be directed to the product, in our case it is primarily covering marketing expenses. Answered your question?

Listen, yes. But I want to clarify this point: if everything is clear with factoring with guarantees, because the money from the App Store and Google Play has already gone, then where are the guarantees for targeted loans for you?

To answer this question, I should probably explain how the system works.

The user comes to our website, registers, and provides basic information about himself and the company. After that, you need to link your iTunes or Google Play store accounts to our platform. At the final step, we also ask you to link the analytical accounts and trackers that the client uses. It is integration with these systems that allows us to obtain data on the basis of which we make a decision about lending. Without this data, we cannot consider a loan application. We can only work on lending if we get access to analytics.

What kind of analytics are we talking about? We started with basic analytics: Google Mobile Analytics, Localytics and Flurry. We have recently completed integrations with three main trackers – Adjust, Mobile App Tracking and AppsFlyer. Now we are doing integration with Facebook.

In order to assess the risk of loan repayment, we need to understand how effective the company does marketing, how much users bring, how quickly the costs of attracting are recouped. All basic parameters (such as user acquisition cost, retention, ARPPU, ARPDAU, LTV, Marketing ROI and so on) we just get from these trackers.

We analyze the sales history for the last 6-12 months and the effectiveness of marketing, as well as the dynamics of changes in parameters over time. Based on the data obtained, we build our scoring model, calculate the risk and make a decision on granting a loan.

Here is the key difference between Aprenita and modern banks. For example, a developer comes and asks the bank for some amount for development and marketing on Facebook. The bank, in turn, looks at his business, but does not understand this business, because modern banks do not have a methodology for evaluating such companies. Next, the bank asks for a personal guarantee and collateral. This is precisely because the bank is not able to assess reliability based on the data available to it. We, in turn, evaluate the efficiency of the business and its ability to develop.

I was just getting ready to ask about a situation when someone with the help of markups got certain indicators, demonstrated them. And it seems to be impossible for you.

Are cheating possible in our system? No! Now I will explain why.

For example, a company has money in the amount of a million dollars. The company does the following: let’s say it invests this million in advertising to get users who are allegedly monetized with some percentage of conversion.

But in our case, cheating does not make sense. Because no matter how you look at it, we will see that the company is losing money on marketing.

The loss of funds is sometimes planned because the company makes a softlatch or when the first trial marketing is underway. That is, the company does not yet know what result it will eventually get, and negative ROI marketing is a normal situation. Then it is necessary to carry out optimizations. But in this case, it is impossible to effectively make a cheat, given that we analyze data for a period of 6-12 months.

Of course, there is always a risk, because this lending is aimed at business development, and this is not buying a winning lottery ticket in advance. This is a business, and the risk is always there. There is no absolute guarantee at all. One thing we can be 100% sure of is that Apple will always take its 30%. This is a one hundred percent guarantee. (laughs).

This whole analytics is important only for credit. In the case of factoring, we simply accelerate payments. We also look at analytics, but there is no need for an in-depth understanding of business efficiency, which I have described.

You started talking about risk, and I immediately came up with an example of the Draw Something project. Because of this game, Zinga started having problems at the time. The project fired, and for two or three months it showed very good dynamics, and then users just got bored. That’s all. There is always a risk.

Absolutely so. What do we see in the gaming industry? If you draw a graph where there will be time on the X axis and the number of users on the Y axis, then very often there is a situation when a large number of people come to the game in a short period of time, and also a large number of people leave it in a short period of time. The rate of “inflow” and “outflow” can be measured through the angle of inclination. If the line went vertically up, then the outflow is likely to be the same.

For example, in puzzles or games in the genre of “I’m looking for” people behave like when watching a TV series. I’ve solved the puzzle – I need the next one. People move from one puzzle to another. The mass of players is not growing so rapidly, but it is not being lost so quickly either.

It is very important to look at the number of sessions, their intensity and duration. In principle, there is a certain bench marking for user behavior in certain genres. Relatively speaking, we watch the weather app once in the morning, another time in the evening. Everything is clear with this. If this is a strategy, then there will be their own patterns of behavior. If this is a clicker, then they are also their own there. Similarly, in the children’s app. We delve into all this when we analyze sessions, look at what type of application, what kind of user behavior in the game is considered normal.

The question is, can you share your bench marking? Or is this classified information?

No, we can’t share this information, it’s private.

Good. As I understand from what you said, Aprenita, in fact, provides assistance in scaling the business.

Exactly so. Moreover, the help can be different: for example, a developer does not want to wait 45 days for the App Store to pay – this is one type of help. If a mobile app developer knows that he can spend more than just last month’s rhubarb on traffic purchase and marketing, then this is also a certain kind of help. And from the point of view of business scaling, this is a much greater help.

Seryozha, if we are talking about the scale, what scale are we ready to support?

Today we have such a situation: we have $15 million, which we can distribute in the form of a loan portfolio.

We have contacts who tell us: “Guys, if you give us two or three million at a time, then come.” We are not ready to work with such clients yet, for the reason that there is too much risk per borrower. At the same time, from the point of view of the borrower himself, there are normal indicators. It’s just a matter of diversifying our loan portfolio within those we work with. We are confident that we will be able to establish cooperation with similar companies in the near future.

We can give up to 3 months of rhubarb and it depends solely on the rating that we build for each company and our vision for the further development of events related to the borrower company and the projected risk. As for the return, we are still working on a six-month period. For the time being, we would like those loans that we give to be paid in equal installments in six to seven months. And we would not like it to be limited to some sums. But the truth of life is that with the pool of free capital that we have, we are ready to make a loan of up to $ 500 thousand for one company, no more.

The question is: and at what percentage of the loan?

Out loud we say from 12% to 20% per annum. The minimum scale of 12% is due to our risk assessment and the cost of capital for us.

Does it depend on the loan amount?

No, the final bid is determined by the risk that we see based on data analysis. For us, the interest rate depends on the risk and on the business efficiency that the borrower company demonstrates. And efficiency is related to user acquisition, conversion, retention, monetization, that is, with what I mentioned before.

The last question: what does a company need to get a loan, in addition to the project? Did you say before that the company should be based in the USA?

At the current moment, this remains the case. at the moment we are working only with those developers who have companies in the USA. There are such and there are not a few of them! We are doing everything possible to start working with companies that are physically registered outside the United States as soon as possible.

Thanks for the interview!

Alexander Semenov talked

Deciphered by Irina Smirnova