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Business Operations Business Models

How Does Splitwise Make Money (Business and Revenue Model)

The Splitwise business model

How Does Splitwise Make Money?
Here’s what you should know:
  • What is Splitwise, and how does Splitwise work?
  • How does Splitwise make money?
  • Premium Subscription (Splitwise Pro)
  • In-app Advertising
  • Splitwise’s profit and revenue
  • What is the Splitwise business and revenue model?
  • Splitwise’s funding and valuation

How does Splitwise make money if it’s free to use? Well, here is a full, in-depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Splitwise business model, their profit and revenue, and how Splitwise works.

What is Splitwise, and how does Splitwise work?

Splitwise is a financial mobile and web app that helps users share and split expenses amongst friends and family.

Founded in 2011 by Jonathan Bittner and Ryan Laughlin, Splitwise now has tens of millions of downloads and is in the top 100 finance apps in the Apple App Store.

How Splitwise works is: First, users must download the app and create an account. Once signed up, users can then create a group including the friends and family the user will be splitting expenses with. After that, users in the group can start added expenses, split the costs, and pay each other back by sending a PayPal or Venmo payment directly through the Splitwise app.

Some of Splitwise’s competitors include Splittr, Cash App, Venmo, and other apps that users can pay each other shared expenses.

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

How does Splitwise make money?

According to Splitwise co-founder, Jonathan Bittner, the app has been downloaded tens of millions of times bringing them millions of registered users since being founded in 2011.

So how does Splitwise make money on those registered users if the service they offer is free?

Below is a breakdown of how much money Splitwise makes and its revenue model. Including how they make their money and how much they from doing it.

Here are the 2 ways of how Splitwise makes money (in 2021):

Splitwise generates revenue for the company in two (2) ways – subscriptions and advertising.

#1. Premium Subscription (Splitwise Pro)

One of the ways Splitwise makes money is by offering a paid subscription version of their free service called Splitwise Pro.

While Splitwise is free to download and use, their paid version offers its own set of perks and added features that the free version does not have such as an ad-free experience, receipt scanning, itemization, default split settings, currency conversion, and more.

Users can upgrade to Splitwise Pro in the app or through the desktop web version.

Splitwise Pro Cost:

  • $2.99 per month
Splitwise Pro Cost | Splitwise Business Model | How Does Splitwise Make Money | How Does Splitwise Work
Source: Splitwise

Note: The conversion rate of users upgrading from free to paid is unknown.

#2. In-app Advertising

The other way Splitwise makes money is through advertising to users who do not upgrade to Splitwise’s premium subscription service, Splitwise Pro, as mentioned above.

While the company’s Privacy Policy page mentions partnering with third party advertisers to display target based ads to users while using the service, we have not seen many, if any at all, advertisements while using the app.

Splitwise’s profit and revenue

Splitwise has not released any official revenue numbers for the company.

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

What is the Splitwise business and revenue model?

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

  • Freemium (upselling) business model
  • Subscription based business model
  • Advertising based business model

Splitwise’s funding and valuation

According to Splitwise’s Crunchbase profile, Splitwise has raised $30.2 million over 6 rounds.