nav
Business Operations Business Models

How Does Signal Make Money (Business and Revenue Model)

The Signal app business model

Signal logo
Here’s what you should know:
  • What is Signal, and how does Signal work?
  • How does Signal make money?
  • Donations
  • Through shopping at Amazon Smile
  • Signal funding and valuation
  • Signal profit and revenue
  • What is the Signal business and revenue model?
  • Signal subsidiaries, acquisitions, and exits

How does Signal make money and how is it free to use? Well, here is a full, in depth, breakdown of their main revenue stream and services they offer, as well as the Signal business and revenue model, how much Signal makes per year, and how Signal works.

What is Signal, and how does Signal work?

Signal is a nonprofit instant messaging service that is built with end-to-end encrypted software.

Developed by Signal Foundation, which was founded by Moxie Marlinspike and Brian Acton in 2018; Signal now has more than 40 million users and over 105 million app downloads, per reports.

So, how does Signal work? To use Signal, users can start by first downloading their mobile app from the Apple App Store or Google Play store; or by downloading their desktop version by visiting their website.

Once downloaded, users will be asked to first verify their phone number, add a first name to their Signal profile, and create a (minimum) 4-digit pin. After that’s done, they can use it like any other instant messaging service by doing things like texting, making phone calls, creating group messages, and more all through their end-to-end encrypted software.

Some of Signal’s competitors include Telegram, WhatsApp, and other data encrypted privacy messaging apps.

Signal App in Apple App Store | Signal Business Model | How Does Signal Make Money? | How Does Signal Work?
Source: Apple App Store | Signal

How does Signal make money?

According to reports, the Signal app has more than 40 million users and over 105 million app downloadsas of early 2021. We suspect those numbers to be higher now.

So how does Signal make money off of all of these users?

Below is a breakdown of how much money Signal makes and its revenue model. Including their main revenue stream and how much they charge for their services.

Here is how Signal makes money in 2022

Signal has a revenue model that makes money in two (2) ways; by accepting donations and through users shopping at Amazon Smile.

#1. Donations

Signal makes most of its money through the donations it receives from its users.

There are a few ways Signal is set up for users to donate; through a one-time donation, monthly (recurring), or even via cryptocurrency. Although Signal is not looking to turn a profit and according to them, donations “help pay for the servers, bandwidth, and continued development of an app.”

Signal Donations | Signal Business Model | How Does Signal Make Money? | How Does Signal Work?
Source: Signal

Note: Signal is legally registered as a 501c3 nonprofit.

#2. Through shopping at Amazon Smile

Because Signal is a 501c3 nonprofit, Signal users can also financially support Signal when they shop through Amazon Smile, Amazon’s nonprofit charitable foundation.

The way it works is: that whenever a user makes a purchase through Signal’s Amazon Smile link, Amazon will donate .5% of their eligible purchases to Signal. Which you can see in the image below.

Signal Amazon Smile | Signal Business Model | How Does Signal Make Money? | How Does Signal Work?
Source: Amazon

Note: This is the official Amazon Smile link that is linked to the Signal Foundation: smile.amazon.com/signal

Signal funding and valuation

The Signal Technology Foundation was solely funded with its initial funding of $50 million from Brian Acton back in 2018. Now, Signal is supported only by grants and donations.

From the words on Signal’s homepage – “Signal is an independent nonprofit. We’re not tied to any major tech companies, and we can never be acquired by one either. Development is supported by grants and donations from people like you.”

Signal profit and revenue

Signal has not released any official reports in regards to company earnings.

Note: Because the Signal Technology Foundation is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Signal business and revenue model?

Signal makes money through a few revenue models that they combine within their company, they are:

  • Freemium business model
  • Pay what you want (PWYW) business model

Signal subsidiaries, acquisitions, and exits

To date, Signal has not made any acquisitions, investments, or exits.