News aggregator application SmartNews had a difficult 2023, starting with widespread layoffs in January and ending with leadership change which saw co-founder Kaisei Hamamoto take on the role of CEO following the abrupt departure of former CEO Ken Suzuki last month. More worryingly, as the landscape continues to change dramatically, and sometimes unpredictably, for the news industry, the startup’s app is climbing in both downloads and active users, according to recent data from app intelligence providers Sensor Tower and Appfigures.
Founded in 2012 in Japan, the company arrived in the US in 2014 and expanded its local news footprint in the early 2020s to cover thousands of US cities.
At a time when major mobile platforms like Apple and Google have both been squared away to provide their own virtual newsstands for mobile and tablet users, social media platforms have also made big plays to become news providers themselves to take on some of the advertising and traffic that had traditionally been the domain of publishers, SmartNews entered the fray with its own take on the medium: They would source news by partnering with publishers. creating algorithms aimed at tailoring more personalized flows for users; deliver the news in a cheerful, streamlined AMP-style format. and sell ads against its traffic to generate revenue.
The formula paid off with a bang. It became the first news startup to achieve a billion-dollar valuation since 2015, as Bloomberg reported in 2019 and then in 2021 — a high-water mark for tech funding, as well as consumers relying more than ever on online channels for news, entertainment, shopping, work and more — its valuation soared to $2 billion .
But it didn’t last: the news app’s numbers have been declining over the past year.
The tide has turned dramatically for news. Some of the most important channels for news traffic — Google Search, social media platforms like Facebook — have changed how they focus and display news links, and that’s had an overall hit to traffic and ad sales. And consumer tastes have changed, too, and it seems the app is also struggling to attract and retain users.
More than a year ago, the company reportedly had 10 million monthly active users in the US., as he began building an ad sales team led by a former Google executive.
But according to estimates from Appfigures, SmartNews’ daily downloads have halved since January of this year, and less than a quarter of the number of daily downloads it had in 2022. The company’s analysis shows that as of 2020, SmartNews has a total of about 45 million total facilities. Given the decline in downloads, Apptopia said the number of 10 million active users today would now be “a big stretch.”
Image Credits: Appfigures
Another company, Sensor tower, added more information, noting that SmartNews had, on average, about 1.7 million daily active users worldwide between Q1 2023 and Q3 2023. This represents a “material” decline in users, the company said, on average up 28% year-over-year over that time frame. A former employee for SmartNews also estimated that monthly actives are now likely to be between 5 and 6 million users, we were told, which was supported by third-party data. Sensor Tower estimates that the SmartNews app has approximately 5 million monthly active users globally from Q1-Q3 2023, down an average of 30% year-over-year, per quarter.
SmartNews declined to comment on any of the data provided by the analytics firms and declined to disclose the numbers.
A recent breakdown of what went wrong at SmartNews from the news site The rest of the world pinned the app’s slump on Suzuki’s “unconventional leadership.”
Specifically, he described how, in the core US market, he resisted product updates and was more concerned with the US political climate than audience metrics.
But another aspect of his leadership may also have involved communication. When the company announced that Suzuki was stepping down and handing over the reins to co-founder Kaisei Hamamoto, it also noted that SmartNews was selecting a new CTO from the US. The company had recruited Cory Ondrejka — a distinguished Facebook and Second Life veteran who was working at Google at the time — to join SmartNews. He told TechCrunch that he was hired directly by Suzuki for the role. Then, the day he joined, he had no idea he’d be working with a different CEO.
“It was news to me,” he told TechCrunch in an interview last month.
Ondrejka admitted he might not have been convinced to jump from Google to SmartNews if Suzuki hadn’t done the recruiting directly – the two had met before, years ago – but insisted things were fine despite the surprise surprise of the first day.
“I’m very happy with where I’m at [the company] it’s right now and where we’re going,” he said. “We all have a lot of work to do. . . But I feel a lot of support.” (SmartNews declined an interview request with new CEO Kaisei Hamamoto.)
Sensor Tower also suggested that expired product iterations and feature launches likely contributed to the drop in consumer interest and engagement with the SmartNews app.
For example, SmartNews’ attempt to launch a more refreshing section on its app, SmartTake, didn’t live up to the task in an early review of the feature this fall, which found the section still included the kind of stories that would encourage “doomscrolling.” — like stories of murder and murder, writer’s strike, dementia and more.
Focusing on more positivity is still a windmill chasing SmartNews.
“I think you can’t build a product that leaves people feeling unhappy and angry all the time and then expect to build something that will long-term achieve your goals and honestly align with what the world needs and what the company’s mission is. said Ondrejka. “In terms of news, you want people to be able to understand what’s going on in the world. You want to be able to do this in a way that doesn’t go away [users] feeling like they’ve just been beaten out of the process.”
He declined to discuss the details of the company’s next steps. However, some of them have been done for a long time by now. From what we understand from a source, there has yet to be a revision of the app called ‘Project Atlas’ – which was scheduled to be released by the end of 2023. A company representative said there will be news in the coming months, which this release could eventually be.
SmartNews’ challenges had other, more public ramifications. Reviews of the company on Glassdoor dropped its rating to below 3 stars, with many saying SmartNews’ future in the US is uncertain, while others complained about the way this year’s layoffs were handled.
These staff shifts have also affected work through redundancies.
“Whenever you have a company coming through, offering something new, alignment is a challenge in itself, even when you have complete freedom,” he said. “There are no magic wands that will make everyone immediately know what to do.”
Whichever direction SmartNews takes, it looks like the competition will remain stiff.
While some social media platforms have moved away from the costly endeavors of building and running news engines, a bevy of Twitter/X alternatives—like Instagram Threads, Mastodon, Bluesky, and others—have positioned themselves as places to get breaking news. The Instagram co-founders have also launched their own news aggregator app this year with Artifact. The app was approaching 407,000 installs as of earlier this fall, according to data.ai.
And TikTok’s massive traction with younger users continues to keep it in the mix for breaking news. Recent report by Pew found that the number of adults who said they got their news from ByteDance’s user-generated video app rose to 14% from just 3% in 2020.
Other apps, including Flipboard and Substack, have released their own features to improve news discovery and conversation, including Flipboard’s public newsrooms and Substack’s Twitter-like notes. The latter also redesigned its app in September to boost discovery and engagement.
One area that seems to be up for debate is whether “news” will be the only long-term thing that SmartNews will be aggregating.
“Congregation is this delightfully broad word that has taken on a very specific set of definitions, based on what we’ve seen over the last decade,” Ondrejka said. “For this concept of providing quality information, concentration is a very good word to describe it. [But] I would be very surprised if the product we ship some time in the future is exactly the product you see now because the reality is the opportunity. As technology changes—and what makes technological change so exciting and sometimes scary—people’s expectations change. What is valuable to them is changing. And you can combine it [with your] vision? I think there is a way out of here. [Users] they will tell us something every moment along the way. I think our category will probably continue to be concentrated because it’s a good word.”
