AppDirect Acquires jBilling to Help Companies Build Billing Into App Marketplaces

Today San Francisco-based AppDirect, a cloud service marketplace, announced its acquisition of Ottawa-based jBilling, an open source billing solution, to help companies create white label app marketplaces, and integrate billing solutions. The terms of the deal were not disclosed. The move will see AppDirect leveraging jBilling’s systems to bring their open source solution to users of its platform. AppDirect raised $8.5 million earlier in the summer in a Series A round led by iNovia Capital.

AppDirect lets companies create branded app marketplaces, essentially letting companies create their own Apple App Store in the cloud, and letting developers distribute their apps in those marketplaces. A major aspect to those marketplaces is billing, from paying developers when their apps are purchased, to charging users for apps.

“What’s so great about this opportunity is that AppDirect has emerged as a leading platform for essentially distributing web-based applications and launching web marketplaces. What we’ve found is core to that platform is really the billing logic. And one of the biggest challenges for people who want to resell cloud applications is the billing engine,” AppDirect president and co-CEO Daniel Saks said in an interview. “Which is why we’re really excited about the acquisition of jBilling because they are one of the longest standing, robust, and simple to use billing systems that exists out there in the market and they’re used by 120,000 companies in over 150 countries.”

AppDirect provides white-label marketplaces for its partners, which include Rackspace, Bell Canada, Appcelerator, and Deutsche Telekom, providing end-to-end services from the marketplace to the backend billing and support. It also provides developers and SaaS companies a means to reach a broader audience by having them submit their app and letting its partners curate and decide on which apps to feature, giving the companies an opportunity to reach millions of potential customers.

“What we see in any market is an evolution where initially you have to go direct to the source to buy a service but as time goes on you start going through a wholesale distribution network,” Saks added. “What’s happening is that as these SaaS companies want to distribute through other channels they need robust reporting and billing. AppDirect enables that and with the combination of jBilling it really provides a lot of flexibility to developers to make it seamless.”

JBilling, which was founded in 2002, will continue to operate as an open source entity. The company’s software lets companies configure a range of billing options, including subscriptions, pre-payments with credit cards, and other pricing options, and it will also be announcing a new edition of its platform for the telecommunications industry. The jBilling Telco Edition will be available both as a SaaS version and a downloadable version, and it also has a free jBilling Community Edition. Some of its existing customers include Constant Contact, Sage, and VeriFone. The company is just one company in an active billing and payment solutions space that has seen companies like Chargify, Recurly, and Zuora come up to provide their services to SaaS companies, however the AppDirect acquisition means that they now have a built-in base of companies that will need access to recurring payments.

AppDirect on the other hand is to enterprise web apps what the Apple App Store is to mobile apps. “As the open platform for the SaaS space, we want to make it very easy for the third-party ecosystems to be distributed through as many channels as possible,” Saks said. “Salesforce has their AppExchange, Google has their Play market, and then we’ll be the open player for everyone else.” With the two companies joining forces, and given their status in their respective industries, it is likely that they will continue to integrate and leverage each other’s technologies to help companies of any size create and charge for their own app marketplace.

Humayun Khan

Humayun Khan

Humayun Khan is a Senior Writer and Analyst at BetaKit. A marketing graduate with honors, Humayun's work experience spans the fields of consumer behaviour with noted contributions in an academic paper published in the Journal of Consumer Psychology and market research consulting having coordinated projects for a major financial services client at Decode Inc. More recently he was involved in business strategy as a Business Analyst for an equipment rental outlet and prior in the National Marketing Department at Ernst & Young LLP. He is passionate about emerging and disrupting technology and its ability to transform and create entirely new industries.

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