Even though app development is considered a fast-paced environment, developers often wait a long time to receive payments, says Pollen CEO and co-founder Martin Macmillan.
"These developers need to put their money to use quickly," Macmillan says. "When I was working as an app developer, other people were building stuff from our apps before we were even getting paid."
Pollen is piloting a system that allows app developers in the U.S. and the U.K. to receive faster access to cash based on payments to App stores such as Apple's. App developers generally wait about two months to be paid by Apple for app sales or in-app payments, Macmillan says. Pollen, which accesses app sales data from the app stores, pays 95% of the proceeds from sales every 7 days to developers and keeps the other 5% as a commission.
This faster payment model is designed to "unlock" capital so developers can accelerate further development or add agility to marketing campaigns, Macmillan says.
"If you launch an app on Jan. 1, you will have to wait until March before you get money from sales. So it can be expensive to fund a two-month marketing campaign up front," Macmillan says. "Smaller developers tend to use their own credit cards to fund those campaigns, or they will pump their venture money directly into advertising, which is not an efficient way to use venture funds."
Pollen does not have a relationship with Apple, but instead stands in for the developers in waiting the 60 days for Apple's payout. Pollen is backed by investors including ClalTech, Archimedia, Shukri Shammas and Alvaro Alvarez del Rio.
"We act as an agent on behalf of the developer," Macmillan says, adding Pollen's tech platform, which interacts electronically with Apple's billing system, performs credit analysis, reconciliation and other payments risk and fulfillment tasks.
Pollen works with mobile advertising networks to perform analysis of sales data and advertising. Pollen also helps app developers reinvest cash through its partnerships with these networks. Pollen would not identify its advertising partners or say how many it works with.
"Depending on how big a marketing campaign you want to do, you may need a substantial pot of cash to fund that campaign, so the wait before you get any revenue from payments or in-app purchases is prohibitive," says Simon Lee, CEO of Locassa, a London-based app developer that is participating in Pollen's test.
Locassa has built education, gaming, and health and fitness apps that have been adopted by institutional users such as The Sun, Canon and the U.K.'s Ministry of Defense. "The important thing about getting the money from payments faster is it frees up capital to scale our campaigns," Lee says.
Pollen is focusing on iOS payments during the pilot, and will expand to other operating systems as it works with more developers and markets outside the U.S. and U.K.
Apple did not return a request for comment on its developer payment policy.
App developers have become popular with payment companies looking to spot new innovation before it becomes widely available. PayPal has made a number of moves over the past year to improve its appeal to developers, including hackathons and its purchase of Braintree, a company that grew popular with developers.