Revenue fell from $25M to $8M—so he raised $75M in crowdfunding and ignored VCs. | Dan Novaes, Co-Founder & CEO of Mode Mobile

How Mode Mobile raised $80M from retail after revenue fell

This is the story of a consumer app whose economics depended on other companies' ad budgets. Mode Mobile pays people to use their phones and funds those rewards from advertisers, so when crypto and fintech offers dried up in 2022, revenue fell from $25m to $8m and the unit economics broke. Novaes kept the company alive with $80m from retail crowdfunding, and now wants to own distribution outright by licensing its technology and buying apps that already have users.

Takeaways

• Advertiser collapse cut revenue from $25M to $8M. Crypto and fintech advertisers paid for downloads, and Mode booked over $10m in a single quarter. Payback stretched from three months to twelve, then Terra Luna and FTX failed, advertisers clawed back, half the staff went, and 2023 revenue was $8m.
• Crowdfunding brought in $80m from retail. $5m through a Reg CF, then $75m through a Reg A nine months later, marketed by newsletter to investors, 80 percent of them over 55. Acquiring one costs $1,000, the average check is $1,000, and reinvestment makes the cohorts look like SaaS.
• Mode pays users for time on their phones. The lock-screen player earned 20 to 30 cents per user per day. Android was the deeper fit because those users are budget conscious. Offers include downloading Robinhood or Coinbase for $10 in Bitcoin, and $100 a month covers a family phone plan.
• Acquisition costs and payback stall good apps. Many apps reach product market fit and then stall when acquisition costs and payback periods stop working. Novaes says he would rather own an app with proven fit and add the incentive layer than build one from scratch.
• InstaLiker's lesson is to ride a hit longer. The app made over $1m in two months and drew a cease and desist from Facebook. A family office put in $1.5m at a $10m pre-money valuation, and Novaes says he should have ridden it out instead of chasing other ideas.
• Mode now licenses its tech and buys apps. Mode did $12m in 2024, grew 50 percent, and cut burn from $5m to $3m. It plans to license its technology the way Roku does and acquire apps and games to capture their users' full lifetime value.

The creator clipping playbook

• Pay creators $30 to $50 per video and find them on marketplaces such as SideShift.
• Pick a niche, because the algorithm finds the people who care about the topic. B2B niches work too.
• Keep the founder, or someone who understands the content process, in the scripting.
• Test within $20,000 to $30,000 of spend, and watch installs, since that money can buy views alone.