On launch, Setapp was considered a possible App Store killer. It bundled apps, then made them available for use under a subscription model. One year in, Setapp hasn’t steamrolled the Mac App Store, but has proven itself nonetheless.
The service now boasts over 100 apps (107, to be exact; it started with 40) and 300,000 users. MacPaw, the company behind Setapp, reports 15,500 of the latter became paid subscribers, and notes $1.5 million in ARR (accounting rate of return).
MacPaw thinks it has the Setapp model knocked:
Scaling the product that is meant to be “for everyone” was an arduous task. But, nevertheless, with time and effort, trial and error, step by step, we got the value proposition right and started introducing people to Setapp by solving their specific problems, only to show them later that the same tool could solve 100 more. Talk about value added.
The company admits it took advantage of a cultural shift toward subscription apps. “Recurring revenue made sense for any developer, whereas breaking down the full price into monthly payments appealed to the ever greater amount of users,” it writes in a blog post. “So, in some ways, we were lucky to catch the trendsetting subscription wave we are still riding.”
It’s a good business model for MacPaw, but the payout model for developers is still a bit murky. Setapp allows users to download a set of apps for use on their Mac, so the 107 available apps quickly distills to a few favorites. Setapp’s suite is also sandboxed, so you won’t be able to continue using an app that may be pulled from the service at some point.
Users also don’t get the latest apps or services. No notable Mac app has launched via Setapp. Apps available for the platform are often limited to older apps, which are given a second life via the subscription service. Setapp promises updates for its apps are included, but many are in maintenance mode, so new features are few and far between.
Setapp didn’t miss its mark, though. Its own survey shows developers are excited about subscriptions, and have a dour view of the Mac App Store. MacPaw’s subscription service also takes much of the boilerplate work like payment processing off the board for developers.
In its way, Setapp is a re-imagined Mac App Store. When it launched, we said: “It will take time to see if Setapp is a viable business model for both Macpaw and developers, but it strikes us as a unique offering that just might grow into something broader.” That statement now seems like foreshadowing. The real difference is MacPaw’s curation; subscribers know they’re getting apps that are lively and work properly, a true differentiator from the Mac App Store’s reputation as a zombie minefield. That alone may be worth the $9.99 per month MacPaw is asking.