This is Why Mosaic Dumped its Portfolio for $100M

Last week, Bending Spoons, the Italian app publisher that recently acquired Evernote, acquired a portfolio of apps for just $100M. I say just because that's not a lot of money considering the IP being sold.

The portfolio of apps, which was owned by Mosaic, included a few known names which got me curious - was the price tag worth it?

So I dug into the data and it's weird...

Mosaic's portfolio contains iOS 16 apps and 10 Android apps. Its leading earners include a translation app (iTranslate), a weather tracker (Clime), a spam call protector (RoboKiller), a PDF scanner (ScanHero), and even a plan tracker, an app for fasting, and more. It's really all over the place.

According to our estimates, the portfolio earned $57M in net revenue in 2020, which is what's left after Apple and Google take their fees.

By that number, Bending Spoons made an amazing deal. And yes, I know this is revenue and not profit.

But 2021 wasn't nearly as good. Revenue across the portfolio dropped a whopping 27% to $42M. The leak slowed down in 2022 but revenue still went down 9% to $38M.

And you can probably guess where this is going. Revenue in 2023 was down even more as the portfolio ended the year with $33M, according to our estimates.

If you're doing the math, that's a 42% drop since 2020. By this number, the deal isn't nearly as good.

So why did Bending Spoons do it?

1. A massive user base - Our estimates show apps in the portfolio were downloaded more than 220M times since 2020. Bending Spoons might have a better idea for how to monetize these users.
2. Paying users - The portfolio is already earning money. Although the trend is negative, there are still thousands of users who are paying. If Bending Spoons can right the ship (or get those users to pay more) the net result could be positive.
3. Top contenders across multiple categories - The portfolio contains several apps that are very popular in their category. Acquiring them means Bending Spoons becomes the leader immediately and has a platform to get more out of the category.
4. China - I saved the most interesting for last! When I dug into where the portfolio is making money from I noticed a surprising pattern. China is the highest or second-highest earner for many apps. Not all, but enough.

China is a big market that's growing fast. Acquiring the portfolio gives Bending Spoons a huge head start in China and also a lot of insight into spending patterns which they can use to improve other apps in their portfolio. It's a massive advantage for the company that collects apps like Evernote. More on Evernote next week.