WhatsApp is a revolutionary, one-of-its-kind messaging app developed by Jan Koum and Brian Acton in 2009.

Since then, its popularity has increased, and now it has 2 billion active users in its kitty within 180 countries across the globe. Besides, approximately 100 billion messages are being exchanged daily by end users, bringing the corporation a massive income. That is why startups are so intrigued with it and want to make an app like WhatsApp.

In this blog post, we’ll give a brief answer to ‘What is the WhatsApp revenue model?’ Hence, read further to know this messaging giant’s brief history, revenue model, and future monetization plans and strategies.

A Quick WhatsApp History

Here’s a short timeline by which the revolutionization of this messaging giant took place in this world:

• The idea to start such a messaging service before its release was to let the phone contact through the status of whether the person is on call or available.
• On Feb 24, 2009, the Whatsapp. Inc incorporation took place in California, USA.
• Then, Whatsapp 2.0 was released in August 2009, which increased the number of users to 250,000.
• Acton officially joined the company in November 2009 and persuaded the five former Yahoo friends to invest in the seed funding.
• By 2011, WhatsApp acquired the spot for the first time on the list of Top 20 apps in the USA Apple App Store.
• In 2014, Facebook announced it was acquiring WhatsApp at a $1.5 billion valuation.

Since its acquisition by Facebook, WhatsApp has never looked back. And then, many people who have witnessed the incredible rise of the app started thinking about launching a similar app. This surge in popularity has also sparked interest in creating apps for WhatsApp, designed to enhance or complement its functionality. However, for those seeking to directly earn money online through app development, WhatsApp itself may not be the most lucrative avenue

 But is it truly such a lucrative deal? Let’s find out together.

What Is The WhatsApp Revenue Model, And How Does It Make Money?

Neglecting one of the most popular app monetization strategies, WhatsApp does not earn through in-app advertising. It was initially designed as an add-free platform with no room for in-app advertising in the whole WhatsApp revenue model.

The founders just wanted to focus on excellent user experience and interface. They have created this platform for the users, but not for the big ad placing for the companies.

Even though the revenue was substantial, too, that is the reason why WhatsApp founders opted for WhatsApp Commerce to pay the bills and generate more revenue.

• Initial stage revenue strategy

WhatsApp got its initial funding of Rs.250K with the help of the Five-ex Yahoo employees. They were friends who got the status of co-founders after the financing.

The second and third rounds happened due to Sequoia’s capital, which invested $60 million ($8 million in 2011 and $52 million in 2013). And initially, this became the only source of revenue for the 50 staff members.

The expenditure for the app was not much, so they waved off the initially released $1 subscription fees to the customers. The founders mainly aimed to make the brand a synonym for instant messaging and capitalize on the network effect; thus, the monetary focus was not that much at the initial stage of app development.

This vision for a network first and after that money has proved to be a very profitable strategy for the business. After two long years, Facebook acquired WhatsApp in 2014. All the co-founders turned into employees on the payroll, including Koum, and are now part of Facebook’s Onboard. 

• Facebook integrated WhatsApp revenue model

Facebook said WhatsApp’s realistic revenue strategy came out after the acquisition. And one of the first plans was WhatsApp Business.

After the acquisition, Facebook launched the WhatsApp Business app that mainly lets users build a business profile along with the important links of their website or Facebook page or set up autoresponders. 

These business accounts are free to upgrade for the business. Though, the company mainly makes money through WhatsApp for Business API.

•  WhatsApp for Business API

The company has not stopped but extended its first revenue-generating product, WhatsApp Business API. It helps businesses integrate WhatsApp into their system to reach customers mainly through notifications and deal with queries accordingly. 

The company has restricted the ability to send messages mainly to prevent ad spam. Here, businesses can only message those users who have connected with them first. 

Moreover, the program sends shipping confirmations and appointment reminders and also messages the event tickets to customers.

But, between all this information, you might wonder, ‘How does WhatsApp marketing make money through such an API?’ 

In this strategic WhatsApp revenue model, the business does not have to pay a single penny if it gives a reply to the customer within 24 hours though after that, WhatsApp charges for late responses. 

• Availment of the payment system

WhatsApp has also introduced P2P payments, which are only available exclusively to Indian and Brazilian users. It will further benefit WhatsApp’s business in the company’s biggest market. The companies must pay the messaging giant a flat 3.99% fee per transaction.

Though, there are plans to make this payment software feature available to the rest of the world soon. It will help open gates for relying on the platform as the companies will capitalize on the network effect.

WhatsApp Revenue Model Will Be A Prominent Source of Income For Facebook

The reports are that Facebook is planning to mainly introduce ads in WhatsApp through the status feature and then post ads on Facebook itself that can redirect users to the WhatsApp business accounts and can mainly help in further engagement.

There are mainly 100 billion messages exchanged daily; the amount of data WhatsApp generates is a significant crunch of revenue, which is why it is called a gold mine of Facebook. In 2022, Whatsapp generated revenue of $906 million, and there are expectations for it to rise in the upcoming years.

Even in the future, the WhatsApp revenue model has sky-high potential for earning, making it even more intriguing for novice startups to launch a similar application.