Fundamental Applications (CSE: FUN, Stock Forum) has jumped on the forefront of an explosive wave in social networking – chat applications. As illustrated in a breakdown of industry trends the company released today, teenagers are more likely to segment their online activity into separate apps like Instagram for photo sharing, Twitter to monitor news and Whisper to confess their secrets, rather than doing it all from one main network. The company's ground-breaking anonymous mobile chat app, Serum™, is expected to slot into this paradigm nicely.
Mobile chatting is becoming the main avenue of communication as users are now spending 2 hrs and 42 min per day on mobile devices according to a recent poll published in Flurry back in March.
Because of this meteoric growth, app acquisitions are hitting the stratosphere with WhatsApp getting snapped up for $19.0 billion and Viber for $900 million. Valuation is reaching dizzying heights with Snapchat sitting at $4.0 billion ($153/user) and WeChat at $60.0 billion ($200/user).
It is worth noting that WhatsApp, valued at $42/user, has only begun to generate revenue. The segment of anonymous apps is fast-growing with Secret valued at $100 million and Whisper at $200 million, even though neither is a “real chat” app, like Serum™ is, nor have they generated any revenue.
Valuation in this space has and is being based on the user base which contains the potential for revenue generation in the near future and those users can be easily monetized now with third party advertising models and the ability for the developer to include value-added features or the freemium model.
According to the news release, the company intends to roll out monetization triggers within the next 3 months as it targets a critical mass of 1.0 million users by 2015, significantly boosting its value.
Company CEO, Justin Rasekh, commented on the company's potential within this amazing market opportunity, “We are very excited to grow as truly innovative company. We recognize the importance of user engagement, and therefore have created an app that captures social interactions in a safe, anonymous way with a constant growth model.”
Fundamental Applications was in the news recently when the Vancouver-based anonymous mobile app developer was highlighted by Stockhouse's own Gaalen Engen in his latest Tech Roundup.
Currently there are 14.1m outstanding shares with a market cap of $5.6 million.
FULL DISCLOSURE: Fundamental Applications is a Stockhouse Publishing client.