Startups Tap Into Mobile-App Explosion; As the mobile business booms, an industry of little-known companies that serve app developers is growing quickly behind the scenes

Updated June 7, 2013, 5:50 p.m. ET

Startups Tap Into Mobile-App Explosion

By JESSICA E. LESSIN

As the mobile business booms, an industry of little-known companies that serve app developers is growing quickly behind the scenes.

Companies that build software for app makers to send messages to users, accept payments, track analytic information, store data and more are drawing interest from customers and investors as developers race to build more features into their applications.

Among them are upstarts like Twilio Inc., a San Francisco-based company that offers notification technology, along with other tools. Customers include the car-service Uber Inc., which uses Twilio to send riders text messages when their rides arrive, and TaskRabbit Inc., which texts people who perform on-demand tasks for the service to see it they are available to jump on new ones.Jeff Lawson, Twilio’s chief executive, says its revenue will grow about 150% this year to $50 million and that it is on the path to go public within a year or 18 months.The startup is expected to soon announce it has raised an additional $70 million in financing from investors including Redpoint Ventures and Bessemer Venture Partners, according to a person familiar with the matter.

The company, which also helps companies build their own virtual call centers, says it has more than 200,000 developer accounts, including Web and mobile developers. It charges companies per message or per call sent.

“Developers are a market,” says Mr. Lawson, who believes that the growth in mobile apps will make tools marketed at developers a big business.

Such companies are disproving a Silicon Valley maxim that small developers make poor customers compared with bigger businesses. Some early computer-industry investors learned a harsh lesson, as programming tools sold to PC software developers failed to become a big business.

But the app-service companies are benefiting by the sheer size of the mobile business—with app stores run by Apple Inc. AAPL +0.76% and Google Inc.GOOG +1.75% approaching one million apps each—and the growth of online software that has made it easier for developers to integrate new tools. At the same time, legions of mobile-app makers are trying to build businesses as inexpensively as possible, leading them to outsource features instead of building them themselves. The enthusiasm will be on display starting Monday at Apple’s developer conference in San Francisco, where thousands of attendees will attend sessions on how to improve their apps.

Services that allow developers to accept payments and sell ads were some of the first categories of tools to grow. Among them: payment-processing services like Braintree Payment Solutions LLC and Stripe Inc. and ad-selling services like AdMob, later bought by Google. Global revenue from app stores is expected to rise 62% this year to $25 billion, according to Gartner Inc. IT +0.73%

Now technologies that allow apps to outsource or integrate storage, analytics, email management and a wide variety of services are drawing attention.

App toolmaker StackMob Inc. has seen strong growth for technology that allows developers to host data they need to access—like customer accounts or player scores—remotely. Chief executive Ty Amell says demand has been particularly strong from enterprise companies the past eight months. Overall, the number of apps that use the service has more than tripled in the past year.

Big technology companies already offering hosting services for Web developers are starting to target mobile, too. Google recently announced a service that allows Android developers to use its servers to store data and send push notifications. Facebook Inc.FB +1.40% bought mobile-app toolmaker Parse in April for about $85 million.

Sequoia Capital partner Jim Goetz says that some of the upstarts could become “roadkill” if bigger technology companies decide to incorporate their features into their own operating systems. But he said that the firm has a “pretty good idea” about the bigger companies’ road maps and there are plenty of features they don’t plan to integrate.

Sequoia has invested in several companies in the sector, including Chartboost, which helps mobile games promote and make money from their applications.

Mr. Goetz says he likes the category because the tool makers aren’t dependent on any one company. He acknowledges sales can be slower because of the need to wait for developers to integrate the technology. But that is no different, he notes, from how a semiconductor company relies on a computer maker. “When it finally comes together, it can grow rapidly,” he says.