Creandum Bets on Appcharge - Fritjofsson Joins Board
Carl Fritjofsson, partner at Creandum's San Francisco office, joins the board of Tel Aviv-based Appcharge. In an interview, Fritjofsson calls Appcharge a bold bet to disrupt app store fees for mobile game developers and explains why the Swedish venture capital firm led a $26 million investment in the startup.
Appcharge provides developers with tools to bypass the 30% fees charged by Apple and Google, allowing them to retain more revenue.
“The app store duopoly is crumbling, and developers are ready for change. The EU’s Digital Markets Act and the U.S.’s Open App Markets Act are pivotal in creating new opportunities,” says Carl Fritjofsson, citing recent regulatory shifts in the mobile gaming industry.
“We are on the precipice of a revolution. The combination of regulatory pressure and higher user acquisition costs has created the perfect storm for a company like Appcharge,” he adds.
The Tel Aviv-based startup, which helps game developers sell virtual goods directly to players while bypassing app stores, has raised $26 million in Series A funding at a $100 million valuation. Creandum led the round, which included participation from Supercell, Bitkraft Ventures, Moneta Ventures, and previous investors Play Ventures and Glilot Capital. Appcharge will use the funds to expand its operations and accelerate development efforts.
Competing in a Crowded Market
Still, Appcharge faces challenges in scaling its model. Developers have traditionally relied on Apple and Google’s platforms for visibility and seamless user experiences.
Fritjofsson highlights that Appcharge’s strategy focuses on dedicated web stores. “These users may come to these web stores directly from inside the app or from anywhere else. To drive engagement, the company employs loyalty programs, incentives, and rewards, creating a more personalized experience than traditional in-app purchases,” he says.
While companies like Epic Games have also pursued alternative models to bypass major app stores, Fritjofsson emphasizes Appcharge’s unique approach.
“Epic is fighting the same fight as Appcharge. It’s about breaking up the duopoly of the app stores and giving app developers more control, revenue, and relationships with their users,” he says.
Despite the risks, Appcharge processes $200 million annually and works with major gaming studios, including Huuuge Games and AppLovin. Fritjofsson believes the opportunity is significant.
“The opportunity is there,” he says. “But it will take bold moves and precise execution to make it happen.”
Navigating Geopolitical Risks
When asked about geopolitical tensions in Israel and their potential impact on Appcharge’s ability to attract international clients and investors, Fritjofsson emphasizes Creandum’s commitment to supporting capable founders addressing large markets.
“We have a high moral compass to ensure such technologies have a net benefit to society and also ensure the sources of capital our fund raises from are legitimate and guilt-free. However, as a company, we are non-political and do not take stands in conflicts around the world,” he says.