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Vinay Chopra, founder of Mobiroo
Vinay Chopra, founder of Mobiroo


Mobiroo finds a market all to itself Add to ...

When Vinay Chopra first got into the apps business, it was anything but a safe bet.

“Two and a half years ago, there really wasn’t a way to give paid apps as gifts,” says the founder of Toronto-based startup Mobiroo. “That’s the market I got into.”

In this series, we profile companies that have staked everything on new technologies. In Mr. Chopra’s case, Mobiroo was based on the idea that, just as consumers can give Tim Hortons or Canadian Tire gift cards, they should be able to do the same with smart phone apps.

When the Richard Ivey School of Business grad founded the company in late 2008, Apple Inc. was the only major player in the app gift card market, with cards designed to be used in the iTunes digital store. So Mr. Chopra decided to target BlackBerry users, who had virtually no means of sending paid apps as gifts.

Mobiroo began signing deals with various big-name app makers, including Electronic Arts and Namco. The idea was to create a gift card that cost, say, $15, but gave the user access to $20 worth of premium apps to choose from.

Initially, the sales pitch was hard to make, in large part because no other company had really tried to tap into the market.

“You can’t get the right apps without the right deals, and you can’t get the right deals without the right apps, so it was a bit of a chicken and egg thing,” Mr. Chopra says.

There are two main benefits to consumers and businesses in using Mobiroo’s product.

For consumers, the company sifts through thousands of apps before selecting the best ones to include in its program, saving users from having to pick among dozens of Sodoku apps, for example.

For companies, especially carriers, a Mobiroo gift card can easily be used as a sort of promotional giveaway to new smartphone purchasers. Indeed, Mobiroo offers carriers the option of branding the app selection process on the gift cards they purchase.

Mobiroo’s big break came almost exactly a year ago, when the company signed a massive deal with Research In Motion Ltd.'s United Kingdom branch. The deal put tens of thousands of Mobiroo gift cards in the storefronts of the second-largest mobile phone retailer in the region, and quickly gave the company some much-needed name recognition.

Since then, Mobiroo has expanded into the Android ecosystem, producing gift cards that let users download apps for Google’s mobile operating system.

Surprisingly, even as the paid app industry has exploded, Mobiroo remains perhaps the only company in the world designing these types of gift cards for BlackBerry and Android devices (some retailers, such as Target, have tried similar approaches, but only within their own stores).

Today, Mobiroo has cards in about 12,500 retail locations on six continents. Major retail partners include Best Buy, Shoppers Drug Mart and Zellers.

Less than three years in, Mr. Chopra says the company is profitable. Recently, it was named one of the companies to watch by Deloitte.

However it seems unlikely that Mobiroo will have the BlackBerry and Android app gift card market to itself for long, given the growth of the industry.

This holiday season is crucial for the company, as it will be the first major shopping season since it rolled out its Android gift cards.

Still, Mr. Chopra says he’s not too worried about potential competition from much larger firms, given the myriad deals Mobiroo has signed with developers and retailers around the world, and the size of the apps industry itself.

“There’s a huge runway for this,” he says.

This series continues next Thursday.

Other stories can be found on the Web Strategy section of the Report on Small Business website .

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