AppMail is offering equity at a $13 million pre-money valuation. This price is far too high for the company’s current level of traction. AppMail has been around for four years but has made roughly $50,000 per year in revenue for two consecutive years. There aren’t strong growth signals to justify a $13 million valuation. Plus, this valuation is a drop from AppMail’s previous raise, which closed in March 2021. The company previously raised at a $20 million valuation, and little progress has been made since then. Overall, AppMail’s price is far too high and raises some concerns about the company’s prospects.

Email marketing is a large and growing market. The global email marketing software industry is projected to reach $17.9 billion by 2027, with an expected compound annual growth rate (CAGR) of 13.3% over the next six years. Global growth is driven by Asian countries like China, where the CAGR is expected to reach 17.4% over the next six years. 

Brands are continually investing in and redefining their email marketing programs. The 2000s-era players like Mailchimp have achieved a lot of traction. Mailchimp was recently acquired by Intuit for $12 billion. Newer players like Customer.io are also buzzing. Programs that promise marketers new ways to engage and grow their email marketing audiences are in great demand. AppMail offers a differentiated service that could be attractive to a wide variety of businesses, so the company has potential to become a major player. But the very competitive market may prove to be a challenge for the startup. Overall, AppMail’s market prospects are just below average.

Shi Li, AppMail’s co-founder and CEO, brands himself as a serial entrepreneur. However, his professional experience is somewhat limited. Li spent three years in the real estate insurance industry, then got an MBA from NYU. It appears that Li founded the company that would eventually become AppMail at the Founder Institute, a global startup accelerator, in 2012. According to his LinkedIn, he launched AppMail in 2017. 

Co-founder and Product Manager Duncan Sham is the creative lead and manager of product development. He previously served for five years as a senior designer at Vault49, a creative studio, before founding AppMail. 

Li and Sham work alongside AppMail’s Vice President of Engineering and Research and Development William Warbington. Warbington is a travel professional with more than 15 years of experience in the US Air Force and a large airline IT provider. He devotes part of his time to a travel technology consulting firm, indicating he is not fully dedicated to the company. 

The AppMail team is small and relatively inexperienced in the world of business and technology. While Warbington has some technology experience to offset the founders’ lack thereof, he is not focused on the company full time. This raises questions about the team’s ability to navigate the industry and lead the company to success. There also seem to be meaningful gaps on the team, including marketing, sales, and full-time engineering capacity. Overall, the team is just below average.

Differentiation is one of AppMail’s biggest strengths. Bringing the power of websites into email inboxes is a bold, enticing vision. It’s easy to see why brands could benefit from this type of software. And, remarkably, there aren’t any established companies offering this type of email functionality. AppMail has a real opportunity to revolutionize the email marketing field with minimal competition, at least for now. 

AppMail has also demonstrated decent traction in the airline industry, which was the company’s first focus. LATAM Airlines has proven that AppMail’s technology can boost email conversion rates, and AppMail secured funding from JetBlue Technology Ventures as a strategic investor. While it seems that AppMail is pivoting to focus on all types of email marketing, the company is appropriately positioned to capture airline business. In addition, AppMail holds a patent in a piece of underlying architecture that supports airline inventory apps in emails, which widens its competitive moat in that industry. Overall, AppMail is well-differentiated.

AppMail has existed for four years, but the company is growing slowly. AppMail made decent progress when it was focused on the airline industry. A pilot with LATAM Airlines was successful, JetBlue Technology Ventures invested in the business, and other travel opportunities were apparently in the works. But it seems all of that progress had already been made before AppMail’s previous raise, which closed in March 2021, and little progress seems to have been made since then. 

AppMail is still generating a little less than $50,000 per year, with zero growth between 2019 and 2020. In fact, revenues actually declined by about $1,000 between the two years. Burn was relatively high in 2019, with a net loss of $628,703. With a net loss of $296,395, 2020 was a bit more favorable in terms of net income. Overall, despite AppMail’s slight decrease in revenue, the company’s ability to generate steady income is a large point in its favor. And it still has the backing of major investors. So its performance is above average.

AppMail is a moderately risky investment. The company has already launched a proven product and is generating meager revenue. That makes it less risky than a pre-revenue business with no proof of concept. But AppMail isn’t showing any signs of growth, which could reflect a risky lack of product-market fit. A mild revenue decline between 2019 and 2020 is a source of financial risk, and a decreased valuation from a previous funding round poses a risk to the investment terms. Overall, investors can be somewhat confident that AppMail is running smoothly, but there are major questions about AppMail’s ability to grow and deliver returns. 

There haven’t been many positive updates since AppMail’s last funding round, which is the main reason why this opportunity has been downgraded from Deal to Watch to Neutral. Our previous analysis found that AppMail offered an innovative product with good traction in the airline industry. While the innovative product remains, AppMail hasn’t offered any additional proof of traction or product-market fit since its last raise. The company has clearly made a pivot, rebranding from SAM Email to AppMail and removing its explicit focus on the airline industry. This seems to indicate that AppMail’s progress in the airline industry was running out, and it pivoted to serve any type of business in an effort to increase market opportunity. Another major change between funding rounds is AppMail’s valuation. At its last raise, the company was valued at just shy of $20 million. The current round puts the company at a $13 million valuation. That indicates AppMail is struggling to make progress.

At one time, AppMail seemed like a business with strong growth prospects. A pilot with LATAM Airlines went well, demonstrating the effectiveness of AppMail’s high-engagement email marketing product. Other deals in the works were meant to extend AppMail’s reach in the travel industry. But since then, it seems that AppMail has struggled mightily. The company doesn’t offer any significant points of progress since its last raise. In fact, AppMail has pivoted from its focus on the travel industry. While this pivot might open the company up to more market opportunities, it’s also a sign that product-market fit with airlines just wasn’t there. This is both concerning and confusing given the company’s assumed trajectory. A significant valuation drop from $20 million to $13 million is a sign of these tempered expectations. 

In addition, AppMail’s team is relatively weak. Neither co-founder has significant professional experience, and they are the only two full-time team members. It’s also worth noting that the co-founders’ bios seemed much more compelling in the company’s first raise. They described years of experience, tons of connections in the global travel industry, and time spent on creative projects for Fortune 500 companies. The bios are much more muted this time, which seems to better reflect the co-founders’ real resumes. This inexperience could be one reason why AppMail has struggled in recent months.

Many of the compelling factors that spurred an initial rating of Deal to Watch for AppMail are still at play. AppMail offers an innovative product that has the power to reshape consumers’ relationships with brand emails. Imagine if it were possible to buy products, select airline seats, answer surveys, and more all within an email. Consumers would probably love it, brands would enjoy their increased engagement, and a virtuous cycle could drive quick growth for AppMail. 

It’s also still a great sign that AppMail has found solid traction in the airline industry. JetBlue Technology Ventures backed the company, and AppMail inked a contract with LATAM Airlines that has shown promising results for email engagement rates. In addition, the company is now backed and advised by Jeff Hoffman, co-founder of Priceline. AppMail clearly has strong connections in the travel space and hopefully has more potential to win deals. AppMail has obviously struggled since its last round, with little progress to report. However, the underlying principles of this company still seem favorable. 

AppMail offers a partially patented software product that allows brands to embed apps within their marketing emails. These apps allow customers to buy products, rebook airline seats, answer surveys, and more – all within their email inbox on desktop or mobile. AppMail’s product could be revolutionary in the world of email marketing, and the company has caught the eye of LATAM Airlines (a client) and JetBlue (an investor). In a sizable and rapidly growing market, AppMail’s success could make it a favorable investment.

However, AppMail’s growth has been stagnant since its last fundraise. Its valuation has dropped by $7 million, revenue decreased slightly from 2019 to 2020, and the company doesn’t seem to have surpassed any major milestones since its last round. The team’s lack of relevant experience and insufficient size also raise questions about the company’s chances for success. AppMail’s growth trajectory is far less certain than it appeared at its last round. Therefore, AppMail has been rated a Neutral Deal. 

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