Kuuhubb Update Report: What are Colouring Apps? Filling in the Details; Non-Dilutive Financing to Drive Growth


  • Colouring Apps: Despite the highly competitive landscape of mobile gaming, colouring apps have taken a disruptive approach by innovating a traditional yet timeless experience, while also targeting an underserved group of users. The purpose of this report is to take a deep dive into the industry and more specifically, understand the level of competition that is faced by the companies operating within this niche.

  • Target Market: Middle-aged women with college degrees are the predominant target market for colouring apps. These types of apps can be deemed as high potential because female gamers are mainly underserved. While most gaming apps focus on traditional male interests such as action or adventure, relatively fewer accommodate the needs and interests of women.

  • Mobile Global Games Market: As seen in Exhibit 2, only about 64% of the U.S. population will be active mobile gamers by 2020. However, Exhibit 3 shows that mobile games occupy ~25% of all apps available in the iOS app store. The aggregate effect of the saturated mobile gaming market and the low penetration of mobile users has made the industry extremely competitive.

  • Key Industry Players: The key players in the colouring app segment include Kuuhubb (Recolor), TFG (Colorfy), AppsX (Unicorn) and Pixite (Pigment). We provide an in-depth competitive analysis of the main players.


  • We believe FQ419 (Jun) will mark the bottom in terms of quarterly revenue. With the steady release of new products, we see a return to growth in FQ1/20 (Sept) and then increasing sequentially throughout F2020.
  • The recent non-dilutive financing discussed in the report will provide increased marketing spend that should drive a return to growth for KUU.


  • KUU is trading at a significant discount to its peers - both Global/Nordic gaming and global social apps. Global and Nordic gaming apps are trading at 2019 EV/Sales of 5.0x/3.0x – valuing KUU in the C$0.75-1.25 range. Comparable global social apps are trading on average (excl. FB) at a multiple of US$67/MAU – valuing KUU in the C$4-5 range.