App Acquisition Checklist: 12 Must-Check Items

When buying a mobile app, due diligence is critical to avoid costly mistakes. This checklist covers the 12 key areas you need to evaluate, from verifying revenue and user metrics to assessing legal compliance and technical performance. Here's what you need to know:

Revenue Verification: Confirm revenue using transaction data (e.g., RevenueCat API) and analyze metrics like ARPU and CLV to spot irregularities.
User Metrics: Assess retention, churn, demographics, and growth trends (e.g., DAU/MAU ratio).
Marketplace Position: Check app store rankings, ASO performance, and competitor strategies.
Financial and Legal Due Diligence: Review payment systems, IP ownership, and compliance with laws like CCPA.
Technical Quality: Evaluate app stability, code quality, and platform-specific risks.
Growth Potential: Analyze marketing strategies, scalability, and readiness for the U.S. market.

Tools like CatMRR simplify this process by providing verified revenue data and subscriber counts, ensuring you base decisions on reliable metrics. By following this checklist, you can reduce risks and make informed investment choices.

How to SELL your app & get ACQUIRED: everything I know

Revenue Verification and Analytics

Getting an accurate picture of an app's revenue is absolutely essential when considering an acquisition. Without reliable financial data, you're essentially making decisions in the dark. Ensuring the numbers are accurate protects your investment and helps you make informed choices.

Verify Revenue Authenticity

Always confirm revenue figures using verified transaction data - not screenshots or PDFs that can be easily manipulated.

For apps using RevenueCat, CatMRR simplifies this process by directly connecting to the RevenueCat API. This ensures you’re looking at real customer payment data, not altered or fabricated numbers. With CatMRR, you get access to genuine financial metrics based on actual transactions.

When it comes to Shopify apps, only trust data processed through Shopify’s checkout and Billing API. Shopify strictly prohibits apps from presenting false data to mislead buyers or merchants. Payments must go through Shopify’s checkout system, and all charges should use their Billing API. If the app integrates with external platforms, make sure the financial data aligns across the Shopify admin, the app’s own records, and any linked systems.

Check Historical Financial Performance

Dive into the app’s historical performance by analyzing key metrics:

ARPU: This metric shows how well the app is monetizing its users. A rising ARPU often suggests better strategies are being implemented.
ARPPU: This focuses on spending by paying users. Stability or growth in ARPPU can indicate strong customer satisfaction.
CLV: Customer lifetime value helps you understand the long-term profitability of users and guides decisions on marketing budgets.

Additionally, review purchase frequency and conversion rates to confirm that customers are making repeat purchases and engaging with the app over time.

Spot Revenue Irregularities

To ensure the data is consistent, cross-check revenue metrics across Shopify admin, the app’s internal records, and any connected platforms. Look for any discrepancies and investigate further if something doesn’t add up.

Finally, complement your revenue analysis by diving into user metrics to get a complete picture of the app’s performance.

User Metrics Assessment

After verifying revenue, diving into user metrics provides a clearer picture of how an app is performing. User behavior often serves as a window into the overall health of an app. High levels of user engagement can signal long-term potential, while drops in activity might hint at future challenges.

Retention and Churn Rates

Retention and churn rates are key indicators to monitor. Use cohort analysis to evaluate early retention and compare churn rates with industry standards. If specific user groups show a significant drop in retention, it might point to a mismatch between the product and its intended audience.

User Demographics and Location

Understanding where your users are located can reveal both risks and opportunities. For apps targeting the US market, it's essential to know how much of your user base and revenue comes from American users. Digging deeper into state or regional trends can uncover insights, as local economic conditions often impact monetization potential.

Demographics like age and gender also play a role. Younger users may engage more but spend less, while older users might have greater purchasing power. Gender distribution can influence how certain app features or categories perform, as preferences often vary between audiences.

Active User Growth Trends

Metrics like Monthly Active Users (MAU), Daily Active Users (DAU), and their ratio provide valuable insight into growth and engagement. Keep an eye on seasonal trends, such as holiday spikes, and assess the rate of organic user acquisition.

Steady growth or consistent user numbers are positive signs, but a decline in active users could be an early indicator of revenue challenges. A higher DAU/MAU ratio suggests frequent app usage, while a lower ratio might indicate that users engage only occasionally.

Additionally, watch for warning signs like shorter session durations or reduced use of key features. These trends can eventually lead to lower retention and impact revenue over time.

Marketplace Position and Competition Analysis

Understanding how an app stacks up in the marketplace is just as important as analyzing its internal performance. In a sea of millions of apps, standing out requires strong visibility and a strategic edge.

Check App Store Performance

Metrics tied to App Store Optimization (ASO) are key to gauging how discoverable an app is. For instance, App Store Ranking and Search Visibility Score reveal how well an app appears in search results, which directly impacts organic user acquisition. Another useful metric is Total Ranked Keywords, which shows how many search terms make the app visible to users. Additionally, Category Rankings help track how the app performs within its specific category over time.

Don’t underestimate the power of visuals and first impressions. Around 60% of users decide whether to download an app based on elements like screenshots, videos, and icons. Ratings and reviews also play a huge role, as they influence trust and credibility.

Check Leaderboard Rankings

Platforms like CatMRR's Revenue Leaderboard can provide a snapshot of an app’s financial performance in relation to its download numbers. Steady leaderboard rankings often indicate strong and consistent monetization. This data is a solid foundation for diving deeper into competitor analysis.

Check Competition

To thrive in a crowded market, it’s essential to understand the competition. Start by identifying direct competitors and analyzing their strengths, weaknesses, and overall strategies. Look at how they differentiate their features, set pricing, and craft their user experience. It’s also worth examining their user acquisition strategies and marketing methods. By doing so, you can uncover gaps or opportunities that your app can leverage to gain an edge. This kind of competitive insight not only helps refine your app's positioning but also highlights areas where you can stand out in a saturated marketplace.

Financial and Legal Due Diligence

Before acquiring an app, it's crucial to thoroughly examine its financial and legal aspects to avoid unexpected risks. In the U.S., regulations around data privacy, payment processing, and intellectual property rights are particularly important and should guide your evaluation process.

Review Payment and Revenue Channels

Start by analyzing how the app generates revenue and ensure its payment systems comply with U.S. financial regulations. For instance, apps offering in-app purchases must follow the policies of major app stores, which dictate acceptable payment methods and associated fees.

Check all revenue streams - whether they come from subscriptions, one-time purchases, advertising, or affiliate programs - and ensure they meet both state and federal tax laws. Each revenue type may have specific compliance requirements. For example, apps relying on advertising must adhere to guidelines for transparency and disclosure.

Take a close look at agreements with payment processors like Stripe or PayPal. Understand their fee structures, any restrictions on fund transfers, and whether you'll need to reapply for these services after the app changes ownership.

Once you've confirmed the revenue channels, shift your focus to verifying the app's ownership and intellectual property (IP) rights.

Verify Ownership and IP Rights

Securing clear ownership of the app's intellectual property is a critical step. Confirm that the seller owns or has transferable licenses for all key assets, including source code, designs, and content. Pay special attention to third-party libraries, APIs, and software development kits (SDKs) to ensure there are no licensing restrictions that could complicate the transfer.

Trademark and copyright ownership must be unambiguous. The app's name, logo, and branding elements should either be registered or clearly documented as original works. Conduct a search through the U.S. Patent and Trademark Office database to check for potential conflicts or unresolved disputes.

Review employment agreements with developers and designers to confirm that proper work-for-hire or IP assignment clauses are in place. This helps prevent future claims on the app's code or designs. Additionally, make sure digital assets like domain names and social media accounts tied to the app are included in the sale and properly documented.

Once ownership is confirmed, move on to evaluating the app's legal and regulatory compliance.

Assess Legal and Regulatory Compliance

Compliance with U.S. privacy laws is non-negotiable. For instance, the California Consumer Privacy Act (CCPA) applies to any app collecting personal data from California residents, regardless of where the business is based. The law requires clear disclosures, user rights, and specific data handling practices.

Review the app's privacy policy to ensure it’s up-to-date and clearly explains what data is collected, how it’s used, and who has access to it. If the app targets children, the policy must also meet the requirements of the Children's Online Privacy Protection Act (COPPA).

Data security is another critical area. Apps handling personal information should have robust safeguards in place, such as encryption for sensitive data, secure transmission methods, and strict access controls. A data breach caused by lax security measures can lead to serious financial and legal repercussions.

Finally, check for compliance with any industry-specific regulations, such as HIPAA for healthcare apps or banking laws for financial apps. Review the app’s terms of service with legal counsel to ensure they are enforceable and provide adequate protection. Investigate any pending legal issues, such as patent infringement claims, regulatory complaints, or ongoing lawsuits, as even minor problems can escalate after acquisition.

Technical Quality and Risk Assessment

After conducting legal due diligence, it's time to dive into the app's technical foundation. This step is crucial for spotting operational risks and ensuring the app can maintain its value over time. A solid technical foundation not only supports long-term performance but also makes future updates and improvements more manageable. Together with financial and legal evaluations, this technical review rounds out the full assessment process.

Check App Stability and Performance

Start by analyzing the app's crash data from the past 12 months using tools like Crashlytics. Look for patterns or spikes in crashes, especially after updates or during specific user actions. These insights can help pinpoint underlying stability issues.

Next, evaluate key performance metrics:

Launch time: Ideally, the app should open in under 3 seconds.
Resource usage: Check for excessive memory consumption or battery drain, as these can frustrate users and lead to churn.
User feedback and bug reports: Dive into app store reviews and support tickets to identify recurring complaints. Filter reviews by date to spot ongoing or unresolved issues. Common problems like freezing, slow load times, or broken features are red flags to document.

Testing the app across various devices and operating system versions is essential. If the app is available on both iOS and Android, confirm it performs equally well on both platforms without favoring one. Consistent performance across devices and systems is a must.

Check Code Quality and Documentation

Once you’ve confirmed the app performs well, shift your focus to the codebase and its documentation. These elements are key to understanding the app’s maintainability and scalability.

Code structure: Review the source repository for clean organization, consistent naming conventions, and adherence to established architectural patterns. Watch for technical debt, such as duplicated code, overly complex functions, or outdated dependencies, as these can complicate future development.
Documentation: Assess the quality of documentation for the codebase and any APIs the app uses. Good documentation should include setup instructions, an overview of the code's architecture, and deployment guidelines. Poor or incomplete documentation can slow down future updates and increase costs.
Development workflow: Check the app's version control history. A healthy repository will show regular commits, meaningful messages, and proper branching strategies. Evidence of code reviews, automated testing, and continuous integration practices are positive signs. Sporadic or poorly documented commits might indicate rushed or disorganized development processes.

Finally, evaluate the app's third-party dependencies and libraries. Outdated or deprecated libraries can pose security risks or compatibility problems. Create a list of all external dependencies, noting their update frequency, licensing terms, and whether any require paid licenses. These factors could add unexpected costs to the acquisition.

Check Platform-Specific Risks

Platform-specific risks can have a significant impact on the app's usability and compliance. Key areas to review include:

App store compliance: Check for any recent rejections or warnings from the iOS App Store or Google Play Store. Non-compliance with guidelines could lead to costly fixes or even removal from the store.
API dependencies: Ensure that API keys are transferable and review their usage limits and associated costs. These external services often play a critical role in the app's functionality.
OS version support: Confirm the app supports the latest operating systems and doesn’t rely on outdated versions that may need immediate updates.
Hardware compatibility: Evaluate whether the app relies on device-specific features like cameras, GPS, or sensors, and ensure there are no compatibility issues.
Regional restrictions: Identify any geographic or platform limitations that could affect the app’s distribution or user base.

Growth Potential and Expansion Opportunities

Evaluating an app's growth potential is critical for ensuring long-term success. This process involves looking beyond current performance metrics to understand how well the app can scale and reach new markets. A comprehensive assessment covers marketing strategies, infrastructure capabilities, and market readiness to confirm the app can handle increased demand and attract a broader user base.

Assess Marketing and User Acquisition Strategies

Once financial and technical insights are in place, it's time to analyze how effectively the app draws in and retains users. Start by reviewing Customer Acquisition Cost (CAC) data across various channels over the past year. Pinpoint which acquisition methods deliver high-quality users with strong retention rates.

Dig into the app's organic growth metrics. Check its app store optimization (ASO) performance, keyword search rankings, and conversion rates from store visits to downloads. Apps that excel in organic growth generally enjoy lower acquisition costs and a steadier user base over time.

Paid advertising performance is another crucial area. Examine campaigns on platforms like Facebook, Google, Apple Search Ads, and TikTok. Factor in any partnerships or influencer collaborations, and analyze Return on Ad Spend (ROAS) for each channel to identify seasonal trends. These insights can guide future marketing budgets and strategies.

Don't overlook referral programs or viral features that may contribute to organic user growth. Also, document any cross-promotional agreements that could continue after acquisition, as these partnerships can provide additional value.

Evaluate Scalability and Infrastructure

Scaling an app successfully requires a robust infrastructure. Start by conducting load and stress tests to uncover any performance bottlenecks or system limitations before expanding.

Examine the app's cloud infrastructure, focusing on whether it uses reliable providers like AWS, Azure, or Google Cloud Platform. Auto-scaling capabilities are essential for handling sudden traffic surges without requiring manual intervention - ensure these systems are set up and functioning as intended.

Review historical performance data from tools like Datadog or New Relic. Look at metrics such as average response times, uptime percentages, and any performance challenges during peak usage periods. This data provides a clear picture of how well the app handles varying levels of traffic.

For global expansion, evaluate the app's use of Content Delivery Networks (CDNs) and other optimizations that enhance user experiences worldwide. Fast load times and reliable performance are crucial for entering new geographic markets.

Request and review updated architectural diagrams and system documentation. A well-documented architecture, including data models and an Architecture Decision Record (ADR), reflects professional development practices and simplifies future scaling efforts.

Ensure US Market Readiness

If the app is targeting the US market, it must meet regional requirements and user expectations. Start by reviewing regulatory compliance, particularly with data privacy laws like the California Consumer Privacy Act (CCPA). Conduct a detailed audit of data collection, storage, and user consent processes to avoid legal risks.

Localization is another key factor. Even if the app is already in English, ensure it uses American spelling, currency formats, date styles, and measurement units (imperial system). These adjustments help the app feel more intuitive to US users.

Finally, test the app's performance on devices and network conditions common in the US. The app should deliver consistent functionality across a wide range of devices and connection speeds to meet the expectations of this diverse user base.

Using CatMRR Features

CatMRR

CatMRR simplifies the app acquisition process by offering tools that provide revenue data verified through the RevenueCat API. This ensures you're working with trustworthy financial metrics. Here’s a breakdown of the key features to help guide your evaluation.

Explore the CatMRR Revenue Leaderboard

The CatMRR Revenue Leaderboard is a great starting point for identifying high-performing apps backed by authenticated data. It displays Monthly Recurring Revenue (MRR) and subscriber counts directly from the RevenueCat API. To get a clearer picture of an app's performance, dive into historical revenue trends and subscriber growth. This verified data helps minimize uncertainty and adds confidence to your due diligence process.

Browse Opportunities in the CatMRR Marketplace

The CatMRR Marketplace showcases app acquisition opportunities with detailed listings. Each listing includes verified revenue data, subscriber counts, and seller contact information. If an app catches your eye, use the provided contact options to connect with the seller directly. While these listings supply essential financial insights, it's still important to conduct thorough due diligence before making decisions.

Leverage Verified Metrics for Better Decisions

CatMRR’s integration with the RevenueCat API ensures that the revenue figures you see are verified and reliable. Including this authenticated data in your reports can enhance credibility and provide a solid foundation for analysis. To make smarter decisions, compare these verified metrics with other performance indicators like user reviews or download trends. This can help you identify areas that may need more investigation.

Additionally, verified subscriber counts can be used to calculate critical ratios like Average Revenue Per User (ARPU) and Customer Lifetime Value (CLV). These figures are essential for evaluating ROI and negotiating effectively. If discrepancies arise between the verified data and other sources, they could signal potential issues that warrant further scrutiny.

Conclusion

Buying an app isn't just about its surface appeal - it requires a deep dive into revenue accuracy, user engagement, technical performance, and legal safeguards. This 12-point checklist helps you avoid pitfalls that could turn a promising investment into a costly mistake.

Having access to reliable data is key. Tools like CatMRR provide revenue numbers verified through the RevenueCat API, offering clear metrics to calculate crucial figures such as ARPU (Average Revenue Per User) and CLV (Customer Lifetime Value) with confidence.

But remember, due diligence doesn’t end once the deal is done. Markets shift, user behaviors evolve, and technical requirements change. Staying vigilant and adaptable ensures your investment keeps pace with these challenges and opportunities.

FAQs

How can I verify that the revenue data from an app seller is accurate and trustworthy?

To ensure the reliability of revenue data shared by an app seller, start by diving into their financial records. Pay close attention to their historical financial statements, ideally covering the last 3–5 years. This helps you spot trends and verify that the numbers are consistent over time. To add another layer of confirmation, compare these figures with their tax filings to validate the reported earnings.

It’s also a good idea to request access to platform-specific revenue dashboards, like app store earnings reports. These dashboards provide a direct view of the revenue data, straight from the source. If you’re not confident in analyzing this information yourself, consider bringing in a financial professional. They can perform a detailed review, identify discrepancies, and flag any potential issues. These steps can give you greater confidence as you evaluate the app for acquisition.

What user metrics should I evaluate to determine an app's potential for long-term growth?

To gauge an app's potential for sustained growth, it's essential to dive into key user metrics that shed light on engagement, retention, and scalability. Start by looking at the Retention Rate - this tells you how effectively the app keeps users coming back over time. Then, examine Daily Active Users (DAU) and Monthly Active Users (MAU) to understand how often people are actively using the app.

Another valuable metric is the Stickiness Ratio (calculated by dividing DAU by MAU). This ratio reveals how engaged and loyal your users are. Lastly, keep an eye on the User Growth Rate to see how quickly the app is attracting new users. Regularly tracking these numbers can give you a solid understanding of the app's growth trajectory and overall health.

What legal and regulatory checks should you prioritize when acquiring an app in the U.S.?

When purchasing an app in the U.S., it’s important to address key legal and regulatory considerations. Begin by ensuring the app complies with privacy laws like the California Consumer Privacy Act (CCPA) and General Data Protection Regulation (GDPR), especially if it processes personal data. You’ll also want to confirm that the app aligns with accessibility standards under the Americans with Disabilities Act (ADA), ensuring it’s usable for all individuals.

Take a close look at the app’s privacy policy to verify it transparently explains data collection and usage practices. Additionally, check for adherence to any industry-specific rules, such as HIPAA for healthcare-related apps or COPPA for apps designed for children. Addressing these aspects can help reduce legal risks and streamline the acquisition process.