Mobile applications developer Jumbuck Entertainment will introduce its own commercialisation program to fund new apps in order to grow the local industry and put the company back on a path to profitability.
The program, aimed at start ups, will provide app developers access to investment funds of between $25,000-100,000 in order to take their ideas global through the Jumbuck distribution network.
But chief executive David Gibbs says the program is also part of a restructuring plan that will help push Jumbuck in the right direction towards profitability.
“The business is going through a fairly substantial repositioning plan lately. We’ve had a few mature products through the US carrier networks that hasn’t pulled a lot of business and hasn’t gone through rebranding.”
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“We have a rather strong balance sheet, and this type of initiative is aimed fairly and squarely towards getting us back into the profitable state.”
The “Launchpad” program comes after the company recently announced a profit downgrade for the second half of the current financial year.
It announced on May 24 a drop in revenue of “mature” products of between $800-900,000, while a further $300-400,000 would be lost due to investment in redesigning and rebranding.
Additionally, a number of one-off adjustments were also announced including a $150,000 charge for moving to a variable billing model with a major carrier, while $400,000 was lost through accrual reversals and “doubtful debt revisions”.
Currently, the company stands to end the fiscal year with a cash balance of between $5.5-6 million. Jumbuck forecast a net profit after tax of $1.5 million in its mid-year update, before these downgrades were announced.
Gibbs says that as part of moving the company back into more profitable territory, the commercialisation program will be searching for more “value-driven” apps in order to generate revenue over a longer period of time.
“We’re willing to consider anything, but if we had a focus we’d be looking at apps with significant revenue models. There are a lot of apps out there that aren’t generating anything, but we want to add some value.”
“We’re looking for apps where there is a sustainable billing model. We do a little bit of work in gaming, so possibly something around that, but the ideal app for us would be something more social media-related.”
Jumbuck offers a number of apps, mostly on its network of 120 carriers in the northern hemisphere, with many related to dating and chat rooms. But Gibbs says the company is willing to consider any idea.
“We’re really targeting this at young, bright ideas coming out of development so we hope to be inundated with thousands of ideas. We want to provide some capital to fund that incubation type environment at the start of a program.”
“My role is converting the business into a better balance of working with carriers to working directly with consumers. We see a lot of value in both offerings… and we want to build on those direct to consumer markets.”
The Launchpad program will also provide developers with access to the in-house business development support, marketing and communications programs. Gibbs says this will allow good ideas to develop past the start up stage by accessing comprehensive business models and mentorship.