As the battle between tech giants Apple and Google and regulators and publishers over app store monopolies continues, a startup called Appcharge has raised $26 million in funding to offer an alternative monetization solution for gaming developers. The Tel Aviv-based company, founded by Maor Sason, has created a platform that enables publishers to build their own sites for selling gaming currencies and virtual goods directly to consumers, bypassing app stores.

The funding round, led by Nordic VC Creandum, values Appcharge at $100 million. Other investors participating in the round include mobile games behemoth Supercell, gaming VC Bitkraft Ventures, Moneta Ventures, and previous backers Play Ventures and Glilot Capital, alongside angel investors. While Appcharge's CEO Maor Sason would not confirm whether Supercell is among its customers, the company processes around $200 million annually in purchases from its "tens" of customers.

Sason, who previously co-founded and led mobile gaming ads startup Appush, was motivated to start Appcharge after the Epic Games lawsuit against Apple in 2020. He recognized the need for developers to own their users again and saw an opportunity to provide a solution. Appcharge's core technology is part of the "headless" commerce trajectory, offering tools to companies to develop their own e-commerce websites with more customization than ordinary website building platforms.

The platform provides technology for linking gaming accounts between apps and stores run by publishers, analytics around pricing and purchasing activity, and takes on some of the work that platforms like Apple and Google do across their app stores. Appcharge acts as the "merchant of record" for games publishers, setting up merchant accounts in countries where publishers have customer bases, creating local entities with tax registration and payment facilities, and integrating sales tax and other fees automatically. The company does not work in mobile ads and has no plans to sell information to third parties for that purpose.

Appcharge's solution is particularly relevant in the current gaming landscape, where companies like Spotify are critical of app stores and regulators are taking action. The startup's approach is seen as a complement to other efforts, such as Epic Games' own app stores for iOS and Android, which aim to reduce friction and increase sales conversions. Appcharge's platform has facilitated $200 million in gross takings, a small fraction of the $107 billion spent in mobile games last year.

The funding comes at a time when gaming startups are finding it harder to close rounds, with market growth remaining sluggish. According to a report from Konvoy Ventures, the number of deals in the last quarter was down 14% on the quarter before, early-stage deals are at their lowest point in five years, and overall market size for gaming has only grown around 2% in the last year. The investment is notable, given the current market conditions.

Carl Fritjofsson, general partner at Creandum, highlighted the challenges faced by game developers in a blog post about the investment. "The introduction of Apple's App Tracking Transparency framework on iOS 14.5 has made it significantly harder and more expensive for apps to reach the right users," he wrote. "This, combined with the growing efforts of browsers to block third-party cookies, makes marketing attribution harder and more expensive. Higher Customer Acquisition Costs (CAC) mean less profitability for game developers. And with more maneuverability around the app stores, a solution may be in sight."

As Appcharge expands its platform, it will be interesting to see how its solution resonates with gaming developers and publishers. With its focus on providing a whole end-to-end solution for direct-to-consumer (D2C) sales, Appcharge is positioning itself as a key player in the evolving gaming monetization landscape.