With a Fresh $3 Million, ActionX Looks to Help Retailers Turn App Downloads Into Mobile Commerce Dollars

Talk to any company that has a mobile app and you’ll likely hear that the most challenging part about the app ecosystem is not getting people to download an app — it’s convincing them to come back time and time again.

ActionX, a startup led by former Thumbplay execs, initially focused on helping gaming and commerce companies increase downloads of their apps, mainly through buying mobile app install ads on Facebook. But now it says it will tackle that bigger challenge: Helping commerce and media companies turn those app downloaders into shoppers and subscribers. And there’s a lot at stake. Mobile commerce sales topped $10 billion in the U.S. in the first half of this year, according to a comScore estimate.

To fuel the new initiative, ActionX has raised $3 million from investors including SoftBank Capital, Verizon Ventures and Lerer Ventures, bringing total funding to $5 million.

“Last year was about driving downloads and moving up the app store,” said CEO Evan Schwartz. “This year is about driving transactions in commerce and subscriptions.”

For starters, ActionX is going to use a tactic that’s now popular on the desktop Web, but is still rather challenging on mobile devices: Ad retargeting, the practice by which advertisers place ads in front of people around the Web after they left a website without completing a desired action (i.e., making a purchase). For example, someone shopping for sneakers who leaves the retailer’s site may see ads for those same sneakers when surfing elsewhere on the Web if they are the target of retargeting.

The practice has historically been difficult to execute on mobile devices, where so-called tracking cookies are blocked by default on Apple iOS devices. But advertisers can now track an iPhone or iPad user’s browsing habits on apps and websites through something called a IDFA or ID For Advertisers.

As a result, if a shopper leaves an app without making a purchase, ActionX will use this identifier, which does not include personally identifiable information, to find that person on another mobile app or website, and will place an ad in front of them. It buys this ad space through the myriad mobile ad networks that aggregate ad real estate on mobile devices.

Interestingly enough, Schwartz’s co-founder at Thumbplay, the ringtone-turned-music-subscription business that sold to Clear Channel, is Are Traasdahl, a CEO at another Lerer Ventures-backed mobile ad targeting firm, Tapad. Another connection to the past: Lerer Ventures’ Eric Hippeau was a board member at Thumbplay when he was a partner at SoftBank Capital.

ActionX said it has signed deals to use its mobile retargeting product on work for JackThreads, the men’s online flash sale site owned by Thrillist Media Group, coupon app SnipSnap, as well as Forbes.

The company will offer retargeting on tablets and mobile phones. When too aggressive, retargeting can potentially turn shoppers off. When done right, it can indeed lure people back to a website by reminding them of an action they didn’t complete, but wanted to. Still, a big open question is whether retargeting can be as effective on the small screens of smartphones.