In Japan, unicorns are news applications.
While the valley is focused on Flipboard and Apple News, in Japan, mobile news applications are the new unicorns of mobile, seeing massive success and hitting goals most US and European news companies only dream about. In what would be considered a stealth move, in the US, Gunosy went IPO on the Tokyo Stock Exchange at the end of April. On the first day of trading, value increased by 22% reaching $360M. Let’s dive into this success.
Gunosy is a mobile news aggregator application http://gunosy.co.jp/ and launched in Japan in early 2013 on iOS and Google Play. The application provides targeted news through the aggregation of RSS feeds.
Its UI, is basic and efficient, with a level of advertising pressure that would not be tolerable for US or European users. The app says it is available in 29 languages, but Japan is the only country where it has been successfully deployed. Its US launch did not reach any kind of visibility, but the deployment in Japan has been an amazing success, proven through the high ranking history on Google Play & the Appstore.
For 9 months, the Gunosy application has been in the top 5 in the news category in both Apple and Google stores as you can see in the 2 graphics from Appanny analytics tool below. It is an absolutely successful performance, especially when you consider the high quality of Gunosy competitors: traditional Japanese media outlets, startups like Smartnews, as well as Yahoo News Japan, which has been the number 1 news application for 3 years in a row.
2. IPO WITH $3M REVENUE
Gunosy’s outstanding ranking was achieved with only 9 million downloads, humble figures for a population of 130 million and a smartphone penetration rate of 70%. The application has a modest 3.5 user rating on the appstore. Therefore we should assume that Gunosy’s number one shareholder, the carrier KDDI, is a key contributor to this success.
Other humble figures include the modest team of 52 people as of May 2015, according to Reuters. But the most surprising element is that Gunosy went IPO with a 12 month revenue of only $3 million. A look to their financial indicators shows that the company lost $11 million due to costs in selling, general and admin.
Those performance indicators did not prevent Gunosy from delivering a good performance once quoted on the TSE as you can see in the graph below from Google Finance.
This successful IPO and great achievements demonstrate 3 key points:
a) Japan has very different financial performance indicators than any other counter. No European or US company would be able to achieve an IPO at this value with such limited numbers of download and revenue.
b) The ranking in the application store is perceived as a key success factor for the investors, even if there are several marketing tools that can influence the rankings
c) Gunosy, and at another scale Smartnews, are demonstrating that news applications have massive potential in Japan, and probably in the other part of the word as well.
The challenge for those companies will be to gain international success – a prize that has eluded both Smartnews and Gunosy thus far.