Look, he argued, Apple was developing a category, one that Life360 can ride on the coat tails of.
Hull pointed to the same grumblings that surfaced regarding Apple’s “Find My Friends”, an app that allows users to track other people using an iOS device.
“Everyone thought that ‘Find My Friends’ was going to be terrible for us,” Hull told The Australian Financial Review, at the time.
“But it turned out to be one of the best things that happened, because it popularised the category. People knew what it was and we saw more customers come on board.”
Investors, who had started loving Life360 once it announced it was heading for a dual listing in the US after a period of utterly ignoring the American ASX-listed company, weren’t convinced.
The stock began to fall. After a year of stellar share price growth, thanks to regular reports that Life360 was signing up more paying subscribers and had incidentally gone viral on TikTok, November’s announcement marked a tipping point south, sending the stock plunging 63 per cent and wiping millions off the company’s market capitalisation.
While the fall has been exacerbated by a global sell-off in risk assets, the wipe-out gathered pace this week following an otherwise positive earnings call. On Thursday, the stock plunged as much as 46 per cent.
And since Apple is the dark cloud that looms over Life360, it makes sense it was partly a trigger.
Location-based stalking
Apple is currently grappling with a wave of allegations that some are using its AirTag device to stalk other people.
A story involving a Sports Illustrated model, Brooks Nader, was widely circulated this month. It describes an iPhone alert Ms Nader received while walking home from a bar at night, and then her discovery of an AirTag in her coat pocket.
Apple has said it’s aware of the stalking problem, and has announced it is rolling out a suite of new safety measures, including linking every AirTag to an Apple ID.
But the allegations of stalking have spilled over into the Life360 universe, with Mr Hull warning investors this week the company could become swept up in an attitude-shift regarding location-based technology.
“We’re watching the privacy concerns relating to Apple AirTags and stalking risks,” Hull told investors on a call on Thursday.
“The scrutiny Apple is facing in the press is moderating growth of the category overall.”
While Hull was careful to point out the news does not change Life360’s ability to drive subscription growth through the Tile integration, he noted it could slow down the company’s hardware sales strategy and had in fact already hit Tile’s sales numbers.
“This may be a headwind for standalone hardware sales until the situation resolves and the category is able to more fully emerge,” he said.
Hardware has never been the main game for Life360, and as most tech companies will say, recurring software revenue is infinitely more valuable than hardware revenue.
But Hull insists there were two main bets with Tile: can Life360 use Tile’s hardware to drive membership upsells? And can this category emerge on its own, like the way Apple’s Airpods did for bluetooth headphones?
On the first part, Hull said the current global supply chain woes have hampered Tile device sales, which are compounded by the concerns stemming from Apple’s stalking issues.
“We’re going to do everything we can to prioritise membership over direct hardware sales,” Hull told analysts.
“Clearly, we’d prefer to be less supply constrained, because it would enable us to capitalise on the second part of our bet with Tile.”
The second part of the bet is that device-based location tracking will emerge as its own clear category, but Apple’s stalking woes have meant the US tech giant has effectively stopped marketing its AirTags until the air is cleaner.
“That’s slowed things down, so it’s a wait and see moment,” Hull says.
‘Stalking’ as a theme isn’t new for Life360, which has worked hard to re-brand itself away from a ‘people tracking app’ to more of a safety and communication platform.
Last year, teenagers baulked at the prospect of their parents tracking them and banded together to give each other tips on how to circumvent the Life360 tracking app on TikTok. Within weeks the #Life360hacks hashtag went viral with millions of views.
Fortunately, some quick thinking on Hull’s part turned what could be a PR disaster into a profoundly useful revenue tool.
Responding to #Life360hacks, Hull, who was expelled from high school as a teenager, created his own TikTok persona and began reframing the notion that Life360 was a faceless, corporate machine trying to control young people.
Presenting as a “naughty-uncle alter ego”, Hulls released waves of short TikTok videos mocking parents who were misusing the app and encouraging kids “to go and get that tattoo”.
The Life360 app shot up the download charts and was the most downloaded app for several months.
After a year when the company managed to boost revenue by 40 per cent year-on-year to $US112.6 million ($156 million), with paid membership alone enjoying a 39 per cent year-on-year leap, (more than twice the level since listing on the ASX in 2019), Life360 has definitely scored some fans.
But whether they will stick around once the company pulls off its planned-US listing, isn’t clear.
Despite being an American business, Life360 issued shares to Australian investors and suffered as its consumer-facing brand wasn’t well-known or understood to Australian retail investors.
The company has managed to turn this market perception round, but the lure of American multiples from a larger, deeper investor pool and in the country where Life360 employs most of its people, is proving too big to resist.
Hull and his team have determined they can attract a much juicier valuation back home, where similar tech companies are enjoying much higher multiples.
“We always saw the ASX as a stepping stone and it just makes a lot of sense that we would eventually be domiciled in our home market… [and where] the multiples, even though they have come down across the board, are still significantly higher in the US,” Hull says.
“When we think of how we could be valued across borders, we do see a gap that we think we can take advantage of.”
