You've just arrived in Katmandu. You're alone, have no place to stay and you're desperate to go trekking up Mount Everest. You need to find some local friends to get you to the roof of the world, but you don't speak a word of the language.
Well, Hello Pal International Inc. (CSE: HP) (OTC: HLLPF) has an app for that. In fact, they have a whole suite of them...
Giving users peak experiences is the company’s mission. Rooted in the basic human desire to communicate and have some fun while learning, this globally based company is positioning itself to be become the next social media giant.
"Hello Pal is everything — it's messaging, it's travel, it's translation, it's language learning," says Ryan Johnson, the company's head of Corporate Development.
"We are very fortunate in that our apps have experienced that X-factor of going viral and capturing users without really having marketed so far, as most other mobile apps would have to do to get where we are."
Organic growth is one of the hallmarks of the company's apps, starting with Hello Pal, their first app to launch. The brain-child of company founder and former Softbank president KL Wong, the meet-up and language-learning app allows users from around the world to connect and converse with one another in a foreign language using their own voice. With virtually no marketing, the app has attracted well over two million users world-wide.
This gives Hello Pal a great start toward becoming one of the next big messaging apps and mirror the success of other mobile messaging apps like the Chinese-based Momo. That's partly because Hello Pal isn't a one-off app — it belongs to a growing family. The company also recently launched Travel Pal, which allows travellers to connect with locals who can offer accommodation, advice and guidance, even in "off-the-grid" destinations.
“Travel Pal is more than Airbnb. Not only can you find people around the world to stay with at no cost, you can find people to go backpacking with, go traveling with or you can host travelers yourself," says Johnson. "There's nothing else out there really successfully offering this."
Travel Pal targets the travel sector by encouraging "social traveling" among its users, where traveling can become much more social through the interaction with locals, as well as with other travelers going to the same destination. It includes all the chat functions of Hello Pal and furthers the company’s mission of bringing the world closer together. While Hello Pal breaks the ice by helping people from different cultures and countries converse online, Travel Pal aims to reduce the barriers to travel so that people can also meet face-to-face.
Another unique strength of Travel Pal is the pre-existing user base built by Hello Pal.
"A comparable travel app might launch and when people log in, there would be very few other users to connect with. It would have a hard time achieving a critical mass of users to make it stick. In Travel Pal’s case, as we work off the same base of users as Hello Pal, we launched with a broad global, active set of users. From the start, when a person downloads the app, there's people from all over the world already there — we really hit the ground running," explains Johnson.
Johnson says two other apps, Learning Pal and Translate Pal, are in the late stages of development. Learning Pal, slated to launch soon, will be competing with other apps like Babbel and Duolingo, but with much more social interaction, helping keep people motivated to learn other languages. The market is huge and Learning Pal has the advantage of very user friendly and social functionality.
"A key feature of Learning Pal is it features phrase books you can download in the Apple and Android store. You can pick from thousands of scenario organised sets of phrases, practice speaking them, and then send that to the person that you're talking with and get their feedback. You hear yourself speak it and they help you to correct it," he says.
The Hello Pal apps are designed to complement each other. Not only can all four be useful to a single user, each can individually attract different user groups. Johnson says the multi-app strategy is a key to the company's growth, and a feature that has made Hello Pal attractive to its institutional investors.
"The upside could be substantial, judging by the success we’ve seen so far. I think the trends that are driving this success aren't going to change — they're only going to get bigger," he explains.
"It's a very steep pyramid where there are lots of apps that don't connect with people for whatever reason, but the ones that make it to the top, their valuations are at a premium."
Social media stocks can yield great returns for investors, especially when a growing, popular app gets purchased by an online giant. Witness Facebook’s $19 billion acquisition of WhatsApp, Google’s $1.65 billion buyout of YouTube and Twitter’s purchase of Vine for $970 million.
Similarly, mobile messaging apps that bridge the human divide like MOMO and WeChat are gaining strength on Wall Street. MOMO recently leapt to an $8.3 billion market-cap while Tencent, owners of WeChat, now commands a $106.2 billion valuation, making it China’s first brand to eclipse the $100 billion mark.
Hello Pal’s impressive early success is attracting some top players from the global financial arena. Hans Xu, a key senior partner of New Margin Ventures Fund based in Hangzhou, China and Special Advisor to Hello Pal, has invested personally in the company every financing round, making him one of its largest shareholders. The fund also invested along with Mr. Xu in the company’s latest oversubscribed financing. New Margin is one of China’s largest venture capital funds, with over $5 billion under management.
With solid financial backing and a sound management team, Hello Pal appears poised to experience impressive growth in the near future. And it all started with founder KL Wong simply wanting to teach his daughter how to read English and Mandarin as young as possible.
"He wanted her to learn to read at an early age and through this he established a very successful award winning early education software company called Brillkids," explains Johnson. "From this, he had his whole team, all his programmers, develop this platform, and Hello Pal was born. It was really started as a passion project that is quickly becoming a commercial success."
Wong saw the financial potential of his passion for language and education and formed the company in 2014. The Hello Pal app launched in May 2015, and the company was listed on Canadian Stock Exchange the following year.
Since then, the company has continued to develop a multi-faceted monetization strategy. Hello Pal offers forms of potential monetization like VIP membership and advertising. With the successful launch of Travel Pal, the company sees increased opportunities for monetization such as travel-industry related sponsorships and revenue sharing. As the company continues to grow its user numbers, these monetisation strategies become more and more important.
Johnson says the potential for further growth is significant because technology has fundamentally changed the way that younger people from the huge Millennial bracket connect.
"This is how young people meet other young people. It's a real paradigm shift in our culture," he says. "It's a massive trend most older people don’t fully realize."
But while a socially connected atmosphere makes apps like the Hello Pal suite successful, they are somewhat unknown to older users, but Johnson says it's based on the same dynamic that made pen pals so popular in an earlier era: that eternal, human urge to connect. Only instead of a pen, now you can use your smartphone.
"It's a good analogy," he describes. "It's the same theme that people from different cultures want to connect and communicate. The neat thing is now you can go anywhere, even the remotest village, and everyone's got a phone. The ability to communicate and get help in off-the-grid places where a lot of people want to go now and get away from everything? We have an app for that."