The banking sector has undergone a profound transformation that has reshaped its very foundations. Who could have imagined a time when individuals could manage their finances entirely through smartphone apps like N26? However, this seemingly strange concept has now become the new normal.

This transformation can be likened to a revolution, and at the forefront of this revolution is the innovative entity known as Neo Bank.

Neo banks have emerged as a disruptive force in the banking ecosystem, customers no longer need to deal with cumbersome paperwork. Instead, you can have financial services at your fingertips.

As a result, the global neobanking market reached a substantial value of USD 66.82 billion in 2022. The projections indicate a remarkable compound annual growth rate (CAGR) of 54.8% from 2023 to 2030.

The onset of the COVID-19 pandemic further fueled this growth, as people increasingly relied on online banking services. Notably, in 2020, Indian neobank startups secured over USD 200 million in funding, exemplifying the sector’s rapid ascent.

If you’re inspired by the remarkable success stories of neobanks like N26, Monzo, or Revolut, then this blog is an invaluable guide for you. Through a comprehensive analysis, we aim to uncover the secrets behind N26’s business model, to help you develop your platform based on these learnings. 

So, let’s begin!

You might be aware of the Binance platform.

Don’t you?

Well, Binance is one of the leading financial technology businesses that have successfully marked its presence in more than 180 countries across the globe. Apart from this, it offers its users the leverage to exchange more than 600 different currencies.

Now you might start wondering about the Binance business model. Your mind will be flooded with questions like how Binance works, how Binance makes money and what are some of the apps like Binance that are performing exceptionally well.

Well, this blog will raise the curtain to all the questions arising within your mind and will educate you on the Binance business model in detail.

So let’s begin the journey to explore Binance Business Model without any delay.

What is Binance: A Leading Digital Asset Trading Platform

In terms of trading volume, Binance is the biggest digital asset trading platform in the world. This platfrom was created especially for safely purchasing, disposing of, or exchanging a variety of crypto assets.

Being a centralized cryptocurrency exchange platform, Binance places a great emphasis on trading between fiat currencies and other cryptocurrencies. The native coin of Binance is known as BNB in the international market, and the company has its own blockchain dubbed BNB chain. 

BNB was initially released as a utility token in 2017, but it is now one of the top cryptocurrencies according to CoinMarketCap. And right now, it provides both holders and traders with a wealth of advantages. When a user exchanges tokens on the BNB chain in the DeFi exchange, such as Pancakeswap, Bakeryswap, etc., BNB coins can be utilized as a gas fee.

Because it offers a wide range of cryptocurrency services in one location, Binance is a hybrid exchange. A simple P2P trading option, an order book system, an OTC desk, staking, learn-to-earn, flexible earnings, Binance Launchpad, Binance DEX, and other such features makes Binance one of the top crypto trading platforms.

A Brief History of Binance

Binance was established in 2017 by Changpeng Zhao (often known as “CZ”) in China, and it has since risen to the top of the cryptocurrency industry.

Changpeng Zhao has experience creating high-frequency trading algorithms for stockbrokers before he entered the nascent cryptocurrency industry and rose to prominence.

Binance began operating in 2017 and eventually moved its offices around to other nations in an effort to evade regulation and legal action. The business would eventually relocate to the Cayman Islands, with a subsidiary, Binance.US, situated in the United States.

Even the largest cryptocurrency exchange in the world by January 2018 with daily trading volume in the billions of dollars was Binance. The business outperformed all rivals in 2021, reaching a peak 24-hour volume of approximately $76 billion.

In addition, BNB, a crypto-token launched by Binance, quickly overtook Bitcoin and Ethereum as the third most traded tokens in the world after its launch. At the moment, Binance is at the center of a global scandal. However, by a wide margin, it continues to hold the top rank as the cryptocurrency exchange with the biggest volume worldwide.

To get a clear idea of how it earned its reputation, let’s go through how Binance has transformed itself through the years.

2017: Changpeng Zhao, the current CEO of Binance, started the company in 2017. It was initially established in China, but by September 2017, when the Chinese government started to strictly regulate the cryptocurrency sector, it had shifted its servers to Japan. The business introduced its own token, BNB, in June. Later, it rose to become the third-most traded token globally.

2018: With a market valuation of more than $1.3 billion by 2018, Binance had already surpassed all other cryptocurrency exchanges to become the biggest in the world. As Japan started implementing harsher cryptocurrency rules in March, the company made an attempt to relocate its headquarters there.

Additionally, the business would file the necessary papers with Malta and Bermuda to create a platform for trading securities. In the same year, the business unveiled Binance Jersey, a separate organization from Binance that is based in Jersey, an island nation close to the French coast. Binance Jersey would enable Binance to provide fiat-to-crypto exchanges utilizing the Euro and the British Pound.

2019: To enable cryptocurrency purchases with a debit or credit card, Binance teamed up with Simplex in January 2019. The corporation was the target of an attack in which $40 million was taken, it was revealed in May. The business started providing perpetual futures contracts in September, allowing for a 125x leverage on the transactions.

2020: According to documents leaked by Forbes staff in October 2020, Changpeng Zhao had built a framework intended to fool US regulators and make money from investors there. The business introduced the blockchain ecosystem known as BSC, or Binance Smart Chain, in September.

2021: The IRS and the US Department of Justice began looking into Binance in May 2021 for possible money laundering and tax evasion. These inquiries would go on and are already in progress.

2022: Binance acquired a sizable $200 million holding in Forbes in February 2022, the business that had just published paperwork. In sharp contrast to the rest of the world, the corporation also declared it wouldn’t stop operating in Russia that year. Later, when they started banning Russians with more than 10,000 Euros from trading on the platform, their position would alter.

Here are some key stats of Binance as of July 2023:

• 24hrs Trading Volume on the Binance Exchange: 38 billion USD
• Cryptocurrencies Listed: 350+
• Number of Registered Users: 140 million
• Lowest Transaction Fees: <0.10%
• Popular Cryptocurrency: BNB

Binance Business Model: How Does Binance Work?

You might be curious to know what value proposition Binance offers to its customers and how its business model has acted as a helping hand behind its huge success.

Well, let’s go through the business model of Binance to understand how it is making money.

1. Customer Segmentation

Customers of Binance can be split into two categories:

Traders: The ones who were looking for a safe and quick platform to trade or swap their digital assets.

Innovators: Innovators in the cryptocurrency space who are constantly eager to publish their concepts.

2. Binance Channels

Being a well-known cryptocurrency platform, Binance features a website as well as apps for iOS and Android.

3. Key Operations

On the Internet, questions and searches about Binance’s main operations and activities are more frequent. Well, it contains

• Trading
• SaaS (software as a service)
• Swap Farming

4. Value Proposition

Among Binance’s value propositions are

Traders: Access to a secure cryptocurrency trading platform with high liquidity and low transaction fees.

Crypto Innovators: In order to support innovative pre-ICO ventures, Binance Labs – a technology incubator, and LaunchPad – a hosting platform for new apps & API interfaces, are made available which is a plus point.

5. Cost Structure of Binance

Binance undoubtedly generates income in a variety of ways, but its cost structure includes,

• I.T. operations salaries,
• (Online/Offline) marketing
• Maintenance of its apps and website
  

6. Binance’s Customer Relationships

In addition to its operations, Binance is also known for the customer support it offers through a variety of channels, including

• Email
• Social Media Sites
• Telephones
• Community and Academy of Binance
  

How Does Binance Make Money: Binance Revenue Model

After going through the business model of Binance, you must be clear about how it has established its roots in the crypto exchange market. Now let’s dive deep into the process that Binance follows to make money.

When it comes to making money, trading commissions, margin charges, interest on cryptocurrency loans, spreads, withdrawal costs, and broker program costs are all ways that Binance generates revenue. Additionally, it generates income from its investments, mining services, cloud offerings, and interchange fees.

• Trading Fees

If we talk about the major source of  Binance’s revenue, trading fees are the answer. There is a 0.1% spot trading fee and a whopping 0.5% buy/sell cryptocurrency fee.

The thing is, any cryptocurrency investments will be subtracted from this total in case you have BNB in your trading account. Due to the presence of BNB in their accounts, traders who want to leverage this option pay a cost that is 25% lower, Isn’t it amazing?

Moreover, trading commissions for both individual traders and institutions keep on changing as per the trading volume over a 30-day period. With lower trading volumes, fees will be lesser; and with bigger trading volumes, fees will be slightly higher.

Additionally, Binance receives revenue from the trading commissions levied by other cryptocurrency exchanges using the Binance Broker Program.

• Deposit & Withdrawal Fees

For cryptocurrency deposits, Binance does not charge a fee. However, depending on where the wallet is being received, they assess a withdrawal fee. Withdrawal rates are based on blockchain networks and are subject to sudden changes due to things like network congestion.

Fiat currency deposits and withdrawals are charged a fee. There are no fees associated with wire transfers made in USD via SWIFT or Signet. Domestic USD withdrawal fees in the US are $15, but the fee for international wire transfers is substantially higher ($35). The use of an ACH transfer for deposits or withdrawals is fee-free.

In addition to other costs, using a debit card for deposits carries a fee of 4.5%. International users of Binance can buy cryptocurrency using credit cards. Credit card purchases cannot be made by US citizens.

• Margin Fees

The interest rate on a margin account is calculated hourly by Binance. Therefore, whether you borrow money for a minute or practically an hour, the fee will be the same.

• Loan Fees For Cryptocurrencies

The terms of Binance’s cryptocurrency-backed loans range from 7 to 180 days. On the site, users’ crypto assets can be used as collateral for loans. Interest fees are how Binance generates revenue.

The amount borrowed, the quantity of collateral posted, the type of currency borrowed, and the payback time chosen all affect the interest rate.

• Exchange Costs For Transactions Using a Crypto Card

Similar to banks that provide debit or credit cards in fiat currency, Binance makes money through transaction fees levied when customers use their Binance crypto cards to make purchases or withdraw cash from an ATM in fiat currency.

• Mining pool Fees

To join Binance’s mining pool, users must pay a 2.5% pool fee for Bitcoin and a 0.5% pool cost for Ether. You can mine coins like BCH, LTC, and others. When using Binance’s mining pool, the fee specific to each cryptocurrency being mined is applied.

Also Read: A Comprehensive Guide to Create a Custom Payment Gateway

Why Hire Apptunix To Build Apps Like Binance?

After going through the business model of Binance, you must have gained some valuable insights into how Binance works. Well, here we come to the next step where you can have your own platform like Binance.

Yes, you heard it right. You can have your own app like Binance. All you need is a crypto exchange development service provider like Apptunix.

At Apptunix, you can get a completely customizable white-label NFT marketplace platform that supports several blockchains. Trade your NFTs to give the purchasers a smooth bidding and purchasing experience. Why keep waiting? Building and launching a custom NFT platform can help you boost your online visibility, especially in the world of cryptocurrency trading. Create, list, and sell your favorite works of art using the centralized white-label NFT market. 

As a top developer of all-encompassing blockchain solutions, Apptunix focuses on creating NFT marketplaces and specialized cryptocurrency trading platforms. Apptunix provides feature-rich NFT marketplace development services for industries including art, digital collectibles, gaming, and asset tokenization. It has vast experience in blockchain development and stands out due to its dedication to excellence and meticulousness.

In addition to this, Apptunix’s Bitcoin exchange development services meet a variety of purposes by providing strong security features and a variety of payment options for increased convenience and security. To learn more, get in touch with Apptunix right away.

The Manifest has recently unveiled its list of most-reviewed B2B companies in Austin and the Apptunix team is proud to secure a spot on this list. We’ve been recognized as a leading mobile app development company in Austin! This is an incredible accolade and we are humbled to be recognized for our invaluable contributions to the industry.

We have been awarded multiple times in the past by The Manifest. Back in November 2021, we won the title of the most reviewed IoT company by The Manifest.

Winning awards for our efforts not only bolsters our vision to digitally empower businesses all over the world but also strengthens the confidence that our clients put in us. As such, we hold dear every recognition.

Would you believe me if I say that your groceries could be delivered at your doorstep in under 10 minutes?

Sounds too good to be true? Well, believe it or not, this is a reality, and all thanks to the rise of quick commerce and innovative apps like Zepto.

For customers who prefer the utter convenience of ordering groceries with just a tap rather than battling traffic and parking, these services prove to be a game changer, offering a seamless solution to their daily itineraries. Unlike traditional warehouses, q-commerce depends on micro-warehouses strategically located near delivery points, stocking a curated array of high-demand items.

So, whether you are a startup or a big name in the grocery business, it’s high time to shed the onus of doing things the old way and test the waters and develop a grocery delivery app like Zepto.

Having second thoughts or unsure about stepping into the world of Q-commerce? Don’t worry, let’s explore the boundless opportunities awaiting in the Indian market.

The Boundless Opportunities in Indian Q-Commerce Market

The Indian qcommerce market is one of the biggest in the world. And why does that matter? Because, as per Statista, the Indian eCommerce market will be having 1,090 million users by 2027 against the global count of 5,290 million.

Moreover, the Indian quick commerce market is expected to grow to $5 billion by 2025. Although there are many players in the market right now racing to make the most out of the market demand for fastest deliveries of groceries and other necessities, the quartet that is leading the grocery wars in India include:

• Zomato-backed Blinkit (Part of Zomato)
• Swiggy-owned Instamart ($800 million)
• Reliance-backed Dunzo ($800 million)
• Soonicorn Zepto ($900 million+)

We have already covered how to build an app like Blinkit. In this blog post, we will put Zepto under the lens.

Owing to the massive popularity enjoyed by the instant delivery service in a short time period, businesses are looking forward to developing apps like Zepto to capitalise on the need for instant grocery delivery in different regions around the world.

Zepto is gaining ground quickly, giving tough competition to rival instant delivery services like Blinkit and Instamart, especially when it comes to delivery time. So the million-dollar question is, “Will it turn out to be a Blinkit and Instamart killer?” Only time will tell.

But why is Zepto becoming so popular in the gigantic Indian market? Well, to understand that we have to start with the basics. So, let’s start with answering the popular question; What is Zepto?

Marketed as “India’s last-minute delivery app,” Blinkit has become a huge success story in the qCommerce market. Formerly known as Grofers till 2021, the delivery business started operations in 2013. It was acquired by Zomato in 2022.

Blinkit locks horns with Instamart, which is, in turn, owned by Zomato competitor, Swiggy. Nonetheless, newer delivery businesses like Zepto – a Soonicorn – and Dunzo – backed by Reliance – are taking the Indian market by storm and might be soon entering the global stage, but for now, it’s all about Blinkit and Instamart.

In this blog post, we will put Blinkit and its business model under the microscope. We will also know how to develop a delivery business like Blinkit. Prior to that, though, we will know a little more about the instant delivery service.

What is Blinkit?

Blinkit is an Indian rapid delivery service known as Grofers until 2021. Founded in 2013 by Albinder Dhindsa and Saurabh Kumar, the instant delivery provider operates across India, covering 23 major cities that include Bengaluru, Chandigarh, Delhi, Gurugram, Hyderabad, Jaipur, Kolkata, Mumbai, Pune, and Vadodara.

In addition to groceries, it delivers fruits and vegetables, household supplies, personal care, and other items in its vast catalogue of 7000+ items.

During its early days as Grofers, the on-demand delivery service started providing services across Delhi NCR and later expanded to cover other regions of the country. Today, it serves 20+ major cities across the most populous country in the world.

Staying justified in its cause of making fast online delivery possible, Grofers reorganised itself as Blinkit and adopted an inventory-based business model.

Blinkit Acquisition by Zomato

The Indian food delivery giant Zomato announced an all-stock acquisition of Blinkit on 24th June 2022. It was completed on 10th August 2022 for a whopping $568 million.

Consumers can make purchases by visiting the Blinkit website or using the web app on their mobile devices. They can also order from Blinkit via the Zomato app.

(Zomato) Blinkit vs Instamart (Swiggy)

Owning similar businesses to give a run for money to competitors isn’t something new in the corporate world. All major business conglomerates like Apple, Google, and Microsoft do it all the time.

Both Zomato and Swiggy are neck-to-neck competitors in the Indian food delivery market segment. These 2 are the prime competitors in the Indian grocery delivery market wars.

Also Read: Develop Your Own Delivery Super Gojek Clone App

While Swiggy took over Instamart (10th August 2020) to cover the grocery delivery business, Zomato purchased Blinkit (completed the acquisition on 11th August 2022) to keep up with its archrival.

While Blinkit focuses more on under-10-minute delivery, Instamart focuses more on quality product packaging. Blinkit has a dedicated website while Instamart doesn’t. Nonetheless, Instamart provides services in more areas than its competitor.

Blinkit Business Model

Unlike other business models, the Blinkit business model comes with a twist. The original business model didn’t perform too well for the online delivery business and as such, the instant delivery service has to come up with a better alternative, which turns out to be an inventory-based business model. Let’s know about each one of the two, one at a time:

The Original Business Model

Starting out as Grofers, Blinkit was initially an on-demand delivery service focusing on daily-use items. It was a hyperlocal delivery service that prioritised convenience all the while bridging the gap between local retailers and buyers. The three important parts of Blinkit’s business model are:

1.Buyers

The company started to make it convenient for customers who don’t want to actually visit a marketplace for purchasing everyday items. This includes users of all age groups and types, including employed professionals, elderly people, the sick, and students.

2.Local Sellers

Blinkit works with local vendors, mainly with sellers that have little to no marketing available. The on-demand delivery service helps them to expand their reach and allows them to make doorstep deliveries without any dedicated delivery staff.

In exchange for their efforts, the local vendor pays a commission fee that is anywhere between 8 to 15% of their product value to Blinkit.

3.The Delivery Team

The instant delivery service divides regions covered into neighbourhoods, with each neighbourhood having assigned specific delivery agents and marked vendors.

These delivery teams ensure that the stores partnered with Blinkit are able to deliver day-to-day articles to clients in the shortest time possible.

The Switch to an Inventory-Based Business Model

The original business model of Blinkit, as Grofers, gained less popularity than what it was meant to. It was successful, but not as per the expectations. Consequently, it shifted its business model to an inventory-based model.

Interestingly, the two business models aren’t completely different. In fact, the inventory-based model is an extension of the original model with the introduction of an inventory system, and therefore, the name.

Unlike the original plan – where the ordered items are delivered straight from the store – the items are first moved to a local warehouse, where they are scrutinised for quality. The items are packed and sent to the customer only after the items successfully pass the quality checks.

How does Blinkit Work and Make Money?

At present, Blinkit is present in over 20 cities. In these cities, Blinkit has store partners almost every 2 kilometres.

The quick online delivery service lets customers order from a wide catalogue of 7k products and guarantees a 10-minute delivery, although it might take a little longer in certain cases like when it’s raining or during peak traffic hours. Nonetheless, it is fast.

It claims to prepare an order for dispatch in less than two minutes to ensure rapid delivery of ordered items. Blinkit has worked extensively on upgrading its tech and enhancing the efficiency of its in-store planning, which helped them to hasten its packaging and delivery times.

The journey of a product from a warehouse to a consumer’s desk is extensive. It involves suppliers, vendors, logistics, delivery partners, and more. This is where Blinkit comes in and makes money by providing services required for small vendors.

When customers place orders on Blinkit, via its mobile app or website, it presents them with different brands and stores available. The instant delivery service charges 8% to 15% to the vendors in exchange for their services.

To diversify its revenue streams, the online grocery delivery business has been investing in new and established brands.

Blinkit Business Model Canvas

How to Make an App Like Blinkit?

Developing an app like Blinkit requires you to leverage the latest mobile app development technologies. Here is the step-by-step process for creating an app like Blinkit:

1.Decide Your Value Proposition

Deciding the value proposition is important for the success of any business idea. The key value proposition for an instant delivery business would be fast delivery, but you can also add others as well. This could include premium packaging, 24×7 availability, et cetera.

2.Choose What You Want to Deliver

Please note that although Blinkit in 2023 provides a wide range of products, it started out as a food delivery platform back in 2013. Therefore, you need to start small.

Think carefully about what you need to start with. You can expand your catalogue over time. Therefore, don’t rush. Research well and then come up with a decision.

3.Choosing the Technology Stack

The decision of choosing a tech stack depends on the platforms that you’re targeting and the type of app that you wish to build.

In the technology stack for developing a mobile app, you need different tools for front-end, back-end, database, security, and so on.

There are several programming languages, mobile app development frameworks, and other tools that make it easier for your development team to work and develop a relevant mobile app to pair with your online food (grocery) delivery business.

Ensure to underline all your mobile app development requirements to make the best pick among your available mobile app development options.

Take home our Comprehensive eGuide on Mobile App Development in 2023.

4.Build a Mobile App

Mobile is the leading space for doing business today. It outshined desktop traffic a long time ago. Today, mcommerce has become the biggest form of ecommerce.

Therefore, irrespective of your business niche, you must be available – reliably and fully prepared – on mobile devices. The best way to do so is by developing a mobile (or web)app.

You can do so on your own or hire a dedicated development team to help you with the project. You need to add:

• An admin panel for facilitating operations for business owners.
• A customer app from where buyers can place orders.
• A merchant/vendor panel or mobile app that allows business partners to take control of their offerings and their visibility over the platform.

After creating the mobile app, you need to test it rigorously to ensure that it has as few bugs as possible.

5.Launch Your Mobile App

Once you’ve completed building your instant delivery app, it’s time to release it. Before releasing the app, ensure that the bugs are kept to a minimum and you have the right features added to your app.

If you want to ensure that you don’t build an app that has no market then you can first opt for building a minimum viable product. It will help you launch your product without spending so much on features other than the most required.

To check the technical feasibility of your project, you can also opt for developing a proof-of-concept document.

Conclusion

Blinkit is a huge success in the rapid delivery market. Being acquired by Zomato is a testament to its success. The Indian grocery market wars are not going to seize anytime soon as it is estimated to grow even bigger in the coming years.

Regardless of your geographical location, you can start an instant delivery business or something similar by following in the footsteps of Blinkit or other quick commerce businesses.

You can enlist an experienced mobile app development company like Apptunix to help you develop a relevant mobile app and release it quickly to start business operations.

As a budding mobile app entrepreneur, you’re always on the lookout for the next big thing in the world of mobile apps. And if you’re anything like us, you’ve probably been keeping a close eye on Clubhouse, the latest sensation in the mobile app development industry.

Clubhouse has quickly become the app everyone is talking about, with its unique audio-only approach and exclusive invite-only model. In just a few months, it attracted millions of users from around the world and has become the go-to platform for networking, sharing ideas, and building communities.

So, what can budding app entrepreneurs learn from the success story of Clubhouse? In this blog, we will take a deep dive into the inner workings of Clubhouse and explore the different factors that have contributed to its meteoric rise. We’ll also discuss the business and revenue model that Clubhouse has adopted and how you can leverage them in your own app.

Thus, if you’re looking to develop your own social media app or Clubhouse clone app, read on to discover the secrets of Clubhouse’s success and get inspired to create the next big thing in the world of mobile apps.

Clubhouse Stats and Facts: Funding and Major Milestones

• Released In: March 2020
• Founder: Paul Davison and Rohan Seth
• Headquarters: San Francisco, California, USA
• Owner: A privately held company
• Valuation (April 2021): $4 billion
• Registered users: 10+ million
• Business Model: Pay what you want (PWYW) to Clubhouse creators

Clubhouse’s Success Story: From Buzz to Profit

Behind every successful Mobile App Startup, there’s often a story of hard work, perseverance, and plenty of setbacks. The Clubhouse is no exception. To truly understand how it became the success it is today, we need to take a closer look at its journey from the very beginning.

• A Little Back Story

Clubhouse was founded by Paul Davison and Rohan Seth in March 2020, but the idea for the app came about well before that. Both of the app’s founders were interested in the idea of using audio to connect people and make something engaging.

The app may seem like an overnight success, but it is actually the result of years of hard work and many failures. Coming from similar backgrounds, both its founders experienced many hurdles and failures in their professional journeys.

• The Failures that Made Clubhouse a Billion-Dollar Business

Davison had previously founded a Social Media Application called Highlight, which used location-based technology to help users discover people nearby who shared their interests. Initially, the app was a success but it failed eventually because of various reasons. After that, he founded two more apps named Roll and Shorts – both of them also failed to get traction for a long-time.

Seth had worked as a product manager at Google and had experience in developing communication tools. He was also a founder of apps like Dayfie and Phone-A-Friend, the apps that initially made their name in the market but failed eventually.

But destiny had some good plans as well for both of them. They met and began exploring different ways to connect people through audio. They were both interested in creating a more intimate and personal social media platform that would allow people to have real-time conversations and share ideas in a more natural way. After experimenting with different concepts, they came up with the idea of Talkshow.

While Talkshow never really got the required traction, it managed to ignite the spark in the founders that led to the creation of Clubhouse.

• What is the Clubhouse App?

Used by brands like TED, L’Oreal Paris, and many others to get consumers’ attention, Clubhouse is an audio-only social media app that allows users to create and join virtual rooms where they can have conversations on various topics.

Contributing to its early success, the app’s exclusive invite-only model helped create a sense of exclusivity and scarcity. The model also helped the company manage growth, as they could control the number of users joining the platform and ensure that the user experience remained high-quality.

Clubhouse’s founders envisioned the app as a way to connect people and provide a platform for meaningful conversations. The app’s design intentionally keeps the focus on audio, with no video or text-based communication. This helps users to focus on the conversation and be more present in the moment, without the distractions that come with other forms of social media.

• The Present State of the Business

Since its launch, Clubhouse has gone on to become one of the fastest-growing social media platforms in recent years. The app has attracted a diverse range of users, including celebrities, entrepreneurs, and thought leaders. Its unique approach to social media has helped it stand out in a crowded market, and its popularity has continued to grow.

Today, Clubhouse has over 10 million registered users worldwide, and its success has inspired other social media platforms to explore the use of audio in their own apps.

Overall, the story of Clubhouse is a testament to the power of hard work, determination, and innovation in the world of startups. While the app’s success may look like a fairy tale from afar, it’s clear that there’s a lot more to the story than what meets the eye.

Also Read: What Is The Secret Sauce Behind Success Of Social Media Apps like Facebook?

How Does Clubhouse Work: Clubhouse Business Model Canvas

Clubhouse is a social networking app that allows users to participate in voice chat rooms on various topics. Launched in 2020, the app quickly gained popularity, particularly among tech industry professionals and entrepreneurs. It is currently available on iOS and Android devices and users can join chat rooms to participate in discussions or start their own chat rooms.

Let’s understand how it works through Clubhouse Business Model Canvas:

1) Clubhouse has been able to attract a large user base by creating an exclusive and invite-only platform. Initially, this model created a sense of exclusivity and scarcity, which helped drive user growth. However, the team ditched the invite-only model in 2021 and became more welcoming to users. Now, it plans to go big and increase its user base just like Instagram – World’s #1 Social Media Platform.

2) The app’s value proposition is mainly centered around providing users with a platform for engaging in live audio conversations with others around the world. It is a space where users can learn about a variety of things and grow knowledge by conversing with experts.

3) It offers an exclusive and intimate experience where users can participate in discussions with thought leaders, entrepreneurs, and other professionals. The platform also provides users with the opportunity to network and connect with other users who share similar interests and passions.

4) Clubhouse’s primary customer segments are professionals, entrepreneurs, and thought leaders who are interested in networking, learning, and sharing knowledge with others. The app is particularly popular among those in the tech industry, but it has expanded to other industries and interest areas as well.

5) The app allows users to tip speakers during chat rooms. This provides an opportunity for influencers and thought leaders to monetize their content on the platform and incentivizes high-quality conversations.

6) Clubhouse has hinted that it may introduce a subscription model in the future. This could allow users to access premium features or exclusive content for a monthly fee. It faces strong competition from other social media platforms such as Twitter, Facebook, and LinkedIn, which have introduced similar audio features. However, Clubhouse’s exclusivity and focus on live audio conversations have helped it stand out in the market.

Overall, Clubhouse’s business model is built around creating a high-quality user experience and leveraging that to monetize through brand partnerships, tipping, and potentially subscriptions. It is also fine to say that the app isn’t fully monetized yet as the company’s primary focus is to build a huge user base first.

How Does Clubhouse Make Money: Clubhouse Revenue Model

Clubhouse is a social media platform that is still relatively new, and its revenue model is still evolving. As of now, Clubhouse does not have any revenue stream and its operations are solely dependent on the funding provided by its investors.

However, it directly allows creators to generate revenue through the platform and has several monetization plans for the future. Let’s shed some light on the same:

• Users Can Tip Clubhouse Creators

Clubhouse allows users to tip speakers during chat rooms. This provides an opportunity for influencers and thought leaders to monetize their content on the platform and incentivizes high-quality conversations.

• Clubhouse’s Future Monetization Plans

Brand partnerships and ticketed content: Clubhouse has partnered with brands to create sponsored chat rooms and events. This allows brands to promote their products or services to Clubhouse’s user base and provides a new revenue stream for the company.

Potential for subscription model: Clubhouse has hinted that it may introduce a subscription model in the future. This could allow users to access premium features or exclusive content for a monthly fee.

It’s important to note that Clubhouse is still in the early stages of monetizing its platform, and the company may introduce new revenue streams or adjust its existing ones as it grows and evolves. However, these are the main ways that Clubhouse currently makes money.

3 Key Takeaways from Clubhouse Business Model and Success Story

Clubhouse has captured the attention of the world with its booming success. Here are some key takeaways that budding entrepreneurs can learn from Clubhouse business model:

1. The Power of Exclusivity and Scarcity for Creating Demand

Clubhouse’s invite-only model created a sense of exclusivity and scarcity, making it more desirable and sought-after. This has helped to generate a lot of buzz around the app, which has translated into a rapid increase in user numbers. This approach can be applied to other products and services as well, as people are often drawn to things that are exclusive or hard to get.

2. The Power of User-Generated Content

Clubhouse’s content is created entirely by its users, who host and participate in audio discussions on a variety of topics. By empowering users to create their own content, Clubhouse has built a strong community that is highly engaged and invested in the app. This is a powerful way to build a loyal following and increase user retention.

3. The Importance of Continuous Innovation

Clubhouse’s success has not come without its challenges, as other social media platforms have quickly jumped on the audio bandwagon. However, Clubhouse has continued to innovate and introduce new features, such as monetization options for creators and the ability to record and save conversations. This has helped to keep the app fresh and relevant and has allowed it to maintain its position as a leader in the audio space. For budding entrepreneurs, it’s important to constantly innovate and evolve to stay ahead in a competitive market.

Also Read: Why YikYak – An Anonymous Social Media App With a Large User Base Failed?

Wrapping Up

In conclusion, Clubhouse business model provides valuable insights into the factors that contribute to a mobile app’s success. Aspiring mobile app entrepreneurs can learn from Clubhouse’s journey and leverage its business and revenue model to create their own successful social media apps. If you’re looking for Clubhouse clone app development, Apptunix’s team of mobile app developers can help you bring your vision to life.

We are a leading mobile app development company that specializes in developing cutting-edge mobile apps for various platforms, including iOS and Android. Our team can assist you with every aspect of mobile app development, including ideation, prototyping, design, development, testing, and deployment.

2023 has been the breakout year in the timeline of AI-powered chatbots. ChatGPT took the world by storm at the end of 2022, and since then nothing has stayed the same. It was the next big step in the evolution of AI chatbots. They are now everywhere!

With the power of artificial intelligence on its side, ChatGPT can help humans to do a lot of things without doing anything, like composing emails, writing essays and stories, do mathematics, convert code from one programming language to another, write code for a ransomware, and the list can go on and on and on. Nonetheless, let’s not digress, and get back to the heart of the matter.

Owing to the success enjoyed by ChatGPT, organisations across the world are now all geared up to launch their own renditions of AI-powered chatbots that can give ChatGPT a run for money. But is that possible? Well, the chances are high! Take a look at the growth of the “chatbot” search query:

Growth trend for the “chatbot” search query

An AI chatbot can do several things for you, including writing a dissertation and creating email replies in brevity to do mobile app marketing and writing code.

The fitness app genre has rapidly gained popularity among mobile applications, and rightfully so. Beyond their attractiveness and convenience, these apps provide a range of distinctive features that significantly aid individuals in achieving their health and fitness objectives.

For those considering the fitness app development, drawing inspiration from leading fitness apps is crucial. Take, for instance, the Planet Fitness App—an exemplar of success. As the fastest-growing fitness center franchisee in North America, Planet Fitness has evolved remarkably since its establishment in 1992.

The Planet Fitness app has become one of the best free fitness apps.

In today’s article, we will discuss the Planet Fitness app, Planet Fitness business model and revenue streams, and more that could help you build an app like Planet Fitness. Let’s get started with the basics!

Nubank is a Brazilian neobank and the largest fintech bank in Latin America headquartered in Sao Paulo. A neobank is an alternative bank that offers banking services digitally without any physical presence.

Neobanking is a mushrooming field that is expected to reach $8.8 trillion by 2027. The average transaction value per user has reached $18.08k in 2023, according to Statista. Thus, it is a sector that businesses are looking forward to tapping into.

Nubank provides a wide array of financial products and services to individuals and small business customers. These include insurance, loans, and savings accounts.

In this blog post, we will understand Nubank, its business model, and what you need to make a neobanking app. So, let us begin!

Not many industries have undergone a similar type of digital transformation as the music industry. Technology has changed every single facet of this industry – from the way music is stored and distributed to how consumers listen to it and artists publish and market it. It has been nothing short of a revolution.

As a result, the worldwide music streaming industry is expected to grow to $46.9 billion by 2027. Considering the craze for several digital music apps and the increasing number of music subscribers, the industry is likely to grow at a significant pace. Adding to it, popular music streaming services like Spotify and SoundCloud have caused the value of the industry to skyrocket and many new players are now planning to enter the market.

If you are also one of them, this blog is for you. It has always been said that if you want to succeed in a particular field, learn from the mistakes of others and embrace their strengths. Keeping this well-known learning in mind, we will explain the SoundCloud business model in this blog to help you learn a few lessons from the story of this unique platform.

So, let’s get started.

SoundCloud Stats and Facts: Funding and Major Milestones

• Founded: 27 August 2007
• Founder: Alexander Ljung and Eric Wahlforss
• Headquarters: Berlin, Germany
• Owner: SoundCloud Limited
• Revenue: $200 million+ in 2020
• Registered users: 76 million
• Business Model Type: Freemium

SoundCloud’s Story: A Mix of Many Ups and Downs

The roots of SoundCloud are in Sweden, where it was launched in 2008. It started as a cool platform for individuals interested in finding the greatest and latest music by budding artists. The founders of SoundCloud met at KTH Royal Institute of Technology located in Stockholm, which is considered to be one of the best computer science universities in the world.

Both have a strong connection with music, so they decided to build a platform like WordPress or Flickr for music. However, very soon after establishing the platform, they moved to Berlin as it was developing a reputation of being the most startup-friendly city in Europe at that time. The accommodation was cheaper and it was easy to find good programmers there.

After 12 months of coding and refining, they finally launched the private beta version of SoundCloud in October 2008.

• The Initial Boom

Their idea was to make music sharing easy for people interested in music. At that time, music files were shared through services like YouSendIt or FTP server which was a bit tedious. So, they launched a cloud-based service with a vision to allow music producers and musicians to easily share their work. It eliminated the need to swap files and people were able to directly collaborate over the servers. It provided the ability to comment on tracks and see how others interact with them.

By solving the problems of music industry, it became an absolute hit right after its launch. More than 160,000 musicians registered on the platform including big artists like Foo Fighters. In the coming years, the platform grew at an exponential rate. It had more than 130 Millions consumers of music by 2013.

• The Inevitable Downfall

By May 2014, SoundCloud was one of the most-loved startups in Berlin. But then, destiny had different plans. Twitter planned to acquire the platform after its attempt to launch a music platform failed at the same time. But, the deal was not successful as SoundCloud asked for $1 Billion while its valuation was $700 Million. It could also be because SoundCloud always had copyright infringement issues even after its best efforts.

After that, the hard time started for SoundCloud. In 2015, Sony pulled its music by many popular artists from the platform as it wasn’t making enough money on it. Winds got a lot rougher when PRS for Music commenced legal proceedings after 5 years of unsuccessful negotiations.

• The Destruction: Just When You Think It Can’t Get Any Worse, It Can.

In 2016, consumers began losing their trust in the platform. They felt that SoundCloud was distracted from its initial focus of supporting small artists and DJs. They believed it started promoting licensed music and high-profile artists more. In some instances, files and music were taken down because of copyright infringement issues, which often left artists disheartened.

Adding more to losing consumers’ interest was the deteriorating Alex’s reputation. Instead of supporting the company or improving the product, he was seen partying with famous artists and taking private jets. Because of this, investors also thought that he lost his focus and stopped supporting the company. As a result, in 2017, the company had to lay off 40% of its staff to save costs. They also received emergency investment and Alex was finally replaced.

The investors onboarded Kerry Trainor as Alex’s replacement and he remained the company’s CEO until 2021. In 2019, Eris also announced his departure from the company. But he still remained as the company advisor.

• The Final Rise: Just When You Think It Can’t Get Any Better, It Can

SoundCloud continues to evolve and thrive in 2022. The reason? Its business model has a social networking feature that lets music fans and artists not only talk with each other but also comment on or rate the music they listen to. It has also recently partnered with live streaming platform Twitch to help artists affected by the COVID-19 pandemic.

In addition to having fans’ feedback on the app, they can also publish ads and links to products on their store. The partnership would help music publishers generate more revenue from live streaming. And fans will enjoy seeing their favorite artists live.

The platform again thrived as many musicians were looking for online streaming platforms where they can connect with fans in real time during the pandemic.

The direction of SoundCloud has changed. Even though there have been rumors of Spotify and Google being interested in purchasing SoundCloud, the founders of the business are confident and openly assert that SoundCloud should remain independent.

How Does SoundCloud Work: SoundCloud Business Model Canvas

Along with being a music streaming application, SoundCloud is a platform that allows people who have a passion for music to communicate with each other. It lets anyone listen to music while music publishers can upload, market, and share their work on the platform.

Let’s understand the SoundCloud Business Model through its business model canvas:

1) The main motive behind creating SoundCloud was to enable anyone to create music tracks and share them everywhere. However, with time, the platform evolved into a music streaming application having the features of a social media app. Today, there is a huge community of music lovers on the platform.

2) Being a multi-sided business model, SoundCloud majorly targets two customer segments. Music artists who want exposure by launching and marketing their soundtracks and die-hard music lovers who are always in search of new, popular, and even undiscovered music tracks.

3) Having faced many ups and downs during its entire journey, the platform evolved a lot for survival. It is still winning because of its artist-centered approach among major competitors like Spotify, Pandora, Apple Music, and many others.

4) Once a user registers on SoundCloud, they can start listening to and uploading content for free. But, they will face ads and the inability to collect royalties and other things in the free version. That’s where paid subscription plans come in.

5) The platform mainly operates on six major value propositions – accessibility, pricing, customization, performance, and community building. It is one of a kind app that lets users communicate with each other and share their passion for music.

In addition, it has always taken new initiatives to help artists evolve and thrive on the platform. That’s the reason why SoundCloud is still a loved platform for music lovers. Let’s now see how the platform makes money.

SoundCloud Revenue Model: How Does SoundCloud Make Money?

According to SoundCloud’s website, the platform attracts more than 170 million listeners per month. So, how does it make money off all these app users? Here are the revenue streams it follows:

1. Advertising

SoundCloud generates revenue by advertising with both artists and brands on the platform. For brands who want to advertise on SoundCloud, it offers many types of advertisement options – for example, audio advertising, display advertising, and sponsorship advertising placements.

Some of the brands that market their offerings on SoundCloud are Amazon, Sony Pictures, Netflix, and Red Bull, among others. For artists, the platform offers a “Promote On SoundCloud” tool where they can promote their tracks for more exposure.

2. SoundCloud Go and Go+

SoundCloud Go and Go+ are monthly subscription services for app users. With SoundCloud Go, app users can unlock several premium features, for example, offline streaming, and ad-free listening. On the other hand, with SoundCloud Go+, they can get rid of previews and have access to premium tracks.

Using Go+, users can also mix music tracks with DJs and have access to high-quality audio. While SoundCloud Go comes at $4.99/month, SoundCloud Go+ comes at $9.99/month. Users can cancel these subscriptions anytime.

3. SoundCloud Pro and Pro Unlimited

While SoundCloud Go and Go+ are subscriptions for listeners, SoundCloud Pro and Pro Unlimited are for artists on the platform. SoundCloud Pro Unlimited lets artists:

• Schedule releases
• Upload unlimited number of tracks
• Get real-time data via SoundCloud’s insights dashboard
• Get a pro badge

It costs artists $12 per month when they pay for a year and $16 per month when they pay per month. Music artists can also subscribe to Repost, which lets them publish tracks to platforms like Apple Music, Spotify, Instagram, and others. 80% of the revenue coming from these platforms goes to artists while 20% goes to SoundCloud.

4. Track Mastering

SoundCloud also provides mastering services to artists and charges $4.99 per track. It allows artists to sound more professional by helping them make their tracks ready for release.

If an artist buys SoundCloud’s Pro Unlimited subscription, they get to master three free tracks per month – along with the option to pay $3.99 for every additional track.

5. Events

SoundCloud also sponsors many music-related events along with its other online activities. The platform generates revenue by selling tickets for these events.

3 Lessons to Learn From SoundCloud’s Story

While we won’t call SoundCloud a very successful business model as its founders made many mistakes in the initial days, you can learn a lot from its story. Let’s check out the top 3 key takeaways from SoundCloud Business Model:

1. SoundCloud Always Remained True to its Artist-Centered Approach

The initial idea behind SoundCloud was to support new and unpopular artists. And the platform never forgets that. Using its recommendation tool, SoundCloud always promoted lesser-known artists. This paved the way for undiscovered talent to get traction and even make entry into the mainstream. Some of the popularly known artists today like Post Malone started their musical journey with SoundCloud.

2. It Had a Great Idea that Provided Value to the Users

No doubt that Spotify comes to everybody’s mind when thinking about music streaming services. But, Spotify’s catalog 0f 30+ million music tracks is nothing against SoundCloud’s 125+ million collections. SoundCloud has also been the go-to choice for those wanting to discover unheard music and it has also stayed in competition because of this reason.

3. SoundCloud Always Provided Attention to the Detail

Commenting is a main social feature on SoundCloud that makes its community stronger. It allows listeners to leave comments at any point on the tracks. Users and fans can ask about particular features on tracks, resulting in exciting conversations between artists and listeners. It is this attention to detail that helped SoundCloud survive and thrive again after many setbacks.

Wrapping Up

SoundCloud is a great case study for anybody planning to invest in the music streaming industry. While it is not as profitable as its competitor Spotify, it has its own place in the heart of users because of its amazing ideas and features. If you also plan to build the next SoundCloud or Clubhouse Clone App, we can help! Explore our social media app development services today!