Free App Valuation Calculator
Knowing how much your app is worth is important as an app owner or publisher, and an app valuation calculator can determine your app’s value quickly and accurately. Whether you decide to sell your app or not, it’s always a good idea to have it valued so you’re aware of its worth should the situation change.
If you’re not looking to sell, it’s still a good idea to know your app’s value to attract potential investors who can help develop it further.
Again, this might not form part of your development plans now, but there’s a good chance it will further down the line. Having an accurate valuation on hand makes it easier to begin engaging with potential buyers and investors who will want to assess how your app is performing and will also strengthen its initial value proposition.
So how exactly do you value your app? Aside from using an app worth calculator, like Appic’s, there are several different ways and the method you choose will correlate to your app’s size, structure and time on the market.
How to calculate the value of your app
If your end users are paying customers, you can use the formula below to calculate your app’s value. This formula will calculate the total value of your existing user base.
Value = Number of Users x Net Profit Per User (User Lifetime Value - Customer Acquisition Cost)
What is User Lifetime Value (LTV)?
The lifetime value (LTV) of a user is the average amount of money a user will spend over time using your app’s products and services.
What is Customer Acquisition Cost (CAC)?
Customer Acquisition Cost (CAC) is the average cost of acquiring a new user through your marketing or sales efforts.
By subtracting the cost of acquiring a new user from the average lifetime value, you can calculate your net profit generated per user. Multiply this figure (net profit per user) by the total number of users your app has. The figure you get will give you an idea of the total value of your current user base.
Another way to calculate your app’s value is to multiply its average monthly revenue by a specific number of months. This method will calculate your app’s value based on the monthly revenue it generates over time.
The total number of months that your app has been published on the App Store can help you determine its estimated revenue over time.
For example, if your app’s monthly revenue is approximately $600 and has been on the App Store for less than 6 months, you may want to sell it for the price of its value at 6 months.
Value = $600 x 6 which equals $3600
If your app has been on the App Store for longer than 6 months, then you might want to value its worth at a year and sell it at this cost.
Value = $600 x 12 which equals $7200
What else affects app value?
It’s important to remember that these are just two ways to calculate your app value. There are other metrics that impact the value of your app that buyers and investors will look at when assessing it. Keep in mind that an app value checker will assess all these metrics in one go, producing a faster, more accurate estimate
The formula for calculating your user base value shows your app value at a fixed point in time but doesn’t take into account your speed of growth or your growth rate. The faster your app grows, the more valuable it will appear to buyers and investors.
However, your growth rate’s importance in determining your app value will increase and decrease depending on the app’s age and development stage.
User churn refers to users who disengage from your app by either logging out permanently or deleting the app. Your churn rate is the number of users who churn from your app over time and is usually measured monthly or annually.
Your churn rate matters because it directly works against your growth rate. You may show impressive growth but if your churn rate is also increasing, it’s going to reduce the net revenue your app brings in, which will lower its value. It’s also important to look at how quickly your users churn. If they’re churning after a few days or several weeks, it will have a bigger impact on your app’s value compared to users who churn after a year or longer.
How frequently your users engage with your app also plays a role in its value. The more users engage with your app, the more likely they are to eventually become paid users (if they aren’t already) and the less likely they are to churn.
Your user engagement is measured by metrics like your daily active users (DAU) and monthly active users (MAU). If you can demonstrate that your engagement is improving over time, it can contribute to a higher app value, as engagement is the strongest predictor of users becoming paid users over time.
Ready to Calculate Your App’s Value?
Ensuring you have an accurate valuation of your app’s worth is vital for future investment and sales opportunities, as well as understanding how your app is performing now.
It’s something you can’t afford to miscalculate as it could impact your earnings or cost you an investment opportunity. But with so many factors playing a role in its valuation, getting an accurate valuation can quickly become overwhelming.
Instead of taking the risk, Appic’s free app valuation calculator can determine your app’s value at the click of a button. Find out how much your app is really worth below.