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Pollen: Helping mobile business to bloom

How sensible financing can close the gap between product and payment

Before moving to PC development, Andrew Smith spent three years making games on iOS. He won't be doing it again soon. "In 10 weeks on Early Access, I've built a bigger fan base with one unfinished game, Tango Fiesta, than I did with two finished games on mobile over three years. Not only that, but the 'quality' of fan - or rather the degree to which they're devoted and the level on which they talk to us about our game is just so much higher than on mobile."

It's an acknowledged problem that the virality of the iOS system is broken. If you don't have the deep pockets to buy adverts or users, or the history to have a fan base waiting for content, or even a friend in the local Apple office, then you have to be very, very lucky to get noticed.

That's where Pollen steps in. The services provided by Pollen can't fix the virality of the system, but the company does hope to provide support in the fields that allow developers to just be developers. Thanks to Apple's lethargic accounting systems being married to a faster income reporting system, developers know well ahead of payment what they've earned - they just can't get it yet and they don't always know when it'll arrive.

Byron Atkinson-Jones has made several iOS games. He says "Money just literally turns up in my account without warning, which is fun when I have to explain what it is to my accountants, worrying when it comes to money laundering laws."

"I could see this money was coming and I couldn't do any anything to unlock it"

So, at the core, Pollen's business advances developers money. It's ostensibly similar to a payday loan system, in that it offers a very short term forward in return for a good-sized cut - you get 95% of the money you're due, two months earlier than usual. Yet unlike a payday loan, this is a safe bet for both parties. After all, Apple must be the world's best credit risk.

Martin MacMillan, one of Pollen's founders, is talking me through the scheme, which is currently in a closed private beta in London and the US. He started his career running as a bond trader for UBS, running short-term credit trading for them up to 1998. "The last thing I did, when I realised FinTech was going to eat the world, was put that business online." After a 7-year stint running a FinTech start-up, he launched his own music app company and immediately ran into trouble.

"I was the guy with the problem. I could see this money was coming and I couldn't do any anything to unlock it. I spoke to lots of other developers and asked 'does anyone else have this problem?' They were, 'there's nothing you can do, it takes as long as it takes. That's not just Apple, that's Google, that's the way all these marketplaces work.'"

"So I took it to some the traditional invoice discounting companies and said, 'Look, I have this many thousands of pounds of Apple receivables I'd like to unlock early, because I want to roll it back into growing my business', and they said 'Great, can you fax us the invoice?' I said I couldn't, because a) I hadn't had a fax machine for ten years and b) there is no invoice. But I could take a screenshot saying that the world's best credit risk is going to pay me this much money on this date. And there was this complete disconnect, they couldn't get their heads around it."

"We want to align ourselves with developers, to show that we understand the problems they're facing"

That was the inspiration behind Pollen - filling the time lag between sales and revenue. Though that's not all Pollen does. The service has also sidled into what used to be the publishing market, offering users help with acquiring users through advertising. If you use their advertising model, then they feed your revenue straight to advertisers according to your directions as you make sales. They also get paid a commission by the ad networks instead of taking the 5 per cent, essentially letting you spend your entire revenue on ads up to two months before you should get it.

They call this system velocity capital because, as long as the lifetime value of each customer is more than your costs, you should see exponential growth. "We want to align ourselves with developers, to show that we understand the problems they're facing," says MacMillan "and we are helping to solve those from a tangential viewpoint to a traditional ad network. We want to be a trusted advisor on their shoulder, who can provide them with useful, actionable insights and advice, and help with the financing."

They're not entirely selfless, of course. From the outside, the interest rate for Pollen's financial backers looks obscenely attractive - as much as a 5 per cent return over 30-60 days. Or they get a commission from the ad companies, if you go down that route. "There's lot of exchange rates and we have to do lots of chopping around in the background..." says MacMillan, explaining their costs. "What looks like a simple, elegant business, is highly-nuanced under the hood. In terms of risk operations, the processing, the anti-money laundering, there are a lot of things that have to happen. We have debt providers, to provide money into our structure, and in order to attract significant volumes of that money in, you have to run the business in a very, very rigorous process-controlled away. It's not actually a regulated business, but we're trying to operate as if we were, which will allow us to scale up quicker."

"Steam feels like home, while mobile feels like hard work, frankly"

Of course, there are still problems that developers want Apple and Google to fix, which Pollen isn't going to address. For example, Atkinson-Jones raises the issue of Apple's opaque app review system. "It's just a traffic light, you don't know where you are in it or how long it will take. Last time it took 2 weeks to get a game through, before that 5 days. It's hard to plan a release schedule like that."

And, of course, Pollen might face problems if Apple or Google ever change to an instant-payment model. MacMillan is confident about their flexibility though. "It's a vertical business on a piece of agnostic tech. The tech knows nothing about app stores - it allows us to go into a central bidding system for a digital product, ingest the data, analyse it and take data-driven lending decisions."

The lure of Pollen isn't enough to bring Smith back though - not yet, at least. "Steam feels like home, while mobile feels like hard work, frankly. And hard work in areas that it shouldn't be - speaking to people who like your game should be the easiest thing in the world, and on Steam I'm able to do it every single day. I'm not saying we'll never go back, but if we do it will be armed with a huge marketing budget or a massive fan base craving a port or an extension of a beloved game we've made together."

And for MacMillan, the iOS app market might only be the start. They're already planning to roll out to Google and other platforms. I put to him that both the music and books markets are also due a huge shake-up. Might Pollen be interested in moving that way? "There are a lot of parallel market opportunities... It's almost like when you've got a hammer, everything looks like a nail. We're seeing a lot of nail vertical marketplaces that exhibit the same criteria, so we're pretty excited." For now, they're just hammering away at the app store.

Dan Griliopoulos avatar

Dan Griliopoulos