Business COVID-19 Startups Venture

Instabug Nets $5M Accel-Led Series A To Help Keep Your Apps From Crashing

Instabug, which provides mobile developers with real-time contextual insights throughout the mobile app lifecycle, has raised $5 million in a Series A led by Accel.

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With the funding, Instabug–which has dual headquarters in Cairo, Egypt, and San Francisco–has raised a total of about $8 million in funding since its 2014 inception. The startup participated in Y Combinator’s winter batch in 2016, raising $120,000 at that time.

Some angel investors also participated in the round, including Amr Awadallah, co-founder of Cloudera, and Jim Payne, founder and CEO of MoPub, which was acquired by Twitter for $350 million in 2013.

Instabug aims to solve a big problem for mobile developers, and that’s to help them more quickly identify and fix bugs within apps. The company launched its offering in beta in 2015, and publicly launched in February 2016 during its time at YC.

Initially, Instabug started with a simple way for testers and beta users to report bugs by shaking their device. Over the years, it has evolved into a platform that provides developers with contextual insights about how their apps are performing in their production environments via bug and crash reporting, and in-app surveys.

So, how does it work exactly? A user literally shakes his/her device and up comes a feedback form within the app  where he/she can comment, and also attach a screenshot of the app with the ability to to highlight the part relevant to their feedback.

A detailed report for each feedback is sent to developers with all device details such as the device model, OS version, memory and storage usage, as well as the wifi and carrier and the user’s location. Or, basically all the details of the testing environment.

Most of Instabug’s 90-person team, including engineers, is based in Cairo. The startup opened an office in San Francisco last year, and is growing its team there. Co-founders Omar Gabr and Moataz Soliman relocated to the Bay Area last year.

Growth

What caught our attention about this company is that in a matter of years, with only $3 million in collective funding, it’s managed to accomplish some things that companies with exponentially more backing and exposure have not.

For one, it’s “almost profitable,” according to Gabr, after seeing the company’s revenue grow 120 percent in 2019. Secondly, Instabug counts some (very) high-profile companies among its more than 25,000 customers including Lyft, Samsung, eBay, Verizon, Philips, Hilton and Houseparty. It’s currently running on 2.5 billion devices and has seen 600 million bugs reported and fixed through its offering. Currently, thousands of apps are using Instabug, including 28 of the top 100 apps on the App Store, according to Gabr.

“We’re very fortunate to have reached that level without spending that much money,” he told Crunchbase News. “We’ve always been disciplined and focused on burn, before it was mainstream.”

And, since the COVID-19 outbreak, Instabug has seen a big spike in usage–about 45 percent since January.

“With more people spending their time at home, there’s more app downloads and more app usage,” Gabr said.

Instabug is designed to streamline the communication between quality assurance and developers, which is very relevant now since everyone is working remotely, Gabr points out.

“Users are striving for the best experience, and the user attention race for quality is getting tougher,” he told Crunchbase News. “They are even less tolerant, so if they encounter bugs or crashes, many users just delete the apps and that’s it. Mobile teams, big and small, can’t afford bugs.”

Instabug’s ability to identify how an app is performing, where it’s failing and how to fix it fast has no doubt been a factor in its growth.

Interestingly, the company just hired its first salesperson last year.

“Everything was inbound before that,” Gabr said. “Customers were just coming to the website and signing up. We didn’t do that much marketing, and were just really focused on building the product.”

Investor POV

Investing in profitable, or nearly profitable, companies is nothing new for Accel. The firm has backed a number of bootstrapped and profitable companies over time. It also actively seeks investments in companies located outside of Silicon Valley with the notion that great companies don’t have to necessarily be born in the region.

In fact, Accel General Partner Rich Wong said Instabug’s beginnings remind him “very much of the early days” of other portfolio companies such as Atlassian in Australia, Rovio in Finland and more recently, UIPath, which was first founded in Romania.

“I just love the grit and the drive of Omar, Moataz and team to build something special from seemingly unlikely beginnings,” Wong told me. “They didn’t grow up in an environment with hundreds of examples of startup success around them like you have here in Silicon Valley, and had to have the guts to do something truly different.”

It’s also worth noting that Instabug managed to raise the money despite the COVID-19 pandemic. Its fundraising conversations with Accel started after the outbreak.

In a relatively short amount of time and under sometimes challenging circumstances, Instabug has been able to win “loyal” customers all over the world, according to Wong.

“It feels like it’s just the beginning,” he said.

Blogroll Illustration: Li-Anne Dias

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