A well-known B2C app through the full-funnel lens: what's excellent, what misfires, what I'd test. Public data, no cheap shots.

The headline set reads like a cautionary tale. Bought by Under Armour in 2015 for $475 million. Sold to Francisco Partners in 2020 for $345 million. Then, October 2022: the barcode scanner, free for a decade and the muscle memory of millions of loggers, moved behind the Premium paywall. The backlash wrote itself. The interesting part came next. In May 2024, two teenagers launched Cal AI, a photo-based calorie tracker. Within two years: 15 million downloads, $30 million in annual revenue. In December 2025, MyFitnessPal bought it.

Three years after raising the toll, they paid to buy the bypass road.

What is excellent

The moat that let them survive the experiment. The crowd-sourced food database is the deepest in the category, and the logging habit sits on top of it. The top of today's ladder is well built too: Premium at $79.99 a year, Premium+ at $99.99 with meal planning, a $1.67-a-month upsell. Textbook laddering, priced on added value.

The misfire: the bottom of the ladder

In 2022 they didn't add a paid rung; they moved the free floor up. The barcode scan wasn't a premium feature, it was the core logging loop, the single lowest-friction step in the daily habit. Paywalling it taxed the exact users whose habit hadn't set yet: the ones who would have organically become sticky, committed, revenue-generating users. The already-embedded grumbled and paid. The marginal user quietly walked, leaving behind a market gap labelled "effortless logging". Two teenagers with a camera feature filled it, and MyFitnessPal ended up buying the feature and the audience back.

The acquisition may well have been right by then. But buying back the users you taxed away, at a competitor's multiple, is an expensive misunderstanding of free-to-paid conversion. You can paywall a feature. But if the feature is the mechanism that makes users sticky, you've neutered your ability to convert.

Regulars will recognise the thread. Calm raised the toll on a narrowing funnel. Duolingo taxed the habit loop its retention depends on. MyFitnessPal moved the toll onto the habit itself, then bought the company that sold the way round it.

What did the buy-back cost? A back-of-envelope

MyFitnessPal never disclosed the price, so treat everything in this section as market arithmetic, not reporting. Smaller profitable consumer apps typically change hands at 2-4x revenue or 3-5x profit. A strategic acquirer with real urgency, buying a must-have feature or making a defensive move, can push that to 4-7x+ ARR, and higher if multiple bidders turn up. Cal AI at the time of the deal: a fast-growing, reportedly profitable business with a run rate in the tens of millions, strong unit economics and obvious strategic fit. Run the conservative multiple and you're already in nine figures; run the strategic one and offers plausibly started in the low-to-mid hundreds of millions, with the final number turning on how competitive the process got, the exact profitability and retention, and how much the buyer valued the photo-AI tech, the growth engine and the defence.

Whatever the true figure, the shape of the trade is the point. The 2022 paywall harvested ARPU from users who were already converted. The bill for the users it never let convert arrived three years later, priced at a competitor's multiple.

What I'd test

Hold the free floor below the habit-formation line. The logging loop stays frictionless and free; the intelligence on top of it, insights, plans, coaching, carries the price. And drive logging usage hard, because once the behaviour embeds, the appetite to get more from what you're measuring only grows.

Then measure any paywall move on 30, 60 and 90-day retention and organic download share, not next-quarter ARPU. The ARPU line always applauds first, and applause drowns out the slow cataclysm in retention, the bedrock of free-to-paid conversion.

Steelman the paywall

Subscriptions are the business, free users cost server money and thin ad yield, and the paywall almost certainly lifted conversion among committed users. Perhaps the maths worked on paper. And the strongest version of the counterargument says the strategy worked in the end: they simply bought the winner. But that version concedes the point. The winner grew in a gap their own product decision and pricing created, and the purchase price, whatever it was, is what a pricing test costs when you run it on your own installed base and let a competitor fill the gap first.

If you charge anywhere in your product: where does your free tier end and where does your user's habit begin? If the answer is "the same place", someone is already building your bypass.

Fix the leaks. Fix your world.

Monetisation and pricing is one of eleven modules in the Revenue Engine diagnostic, and the join between pricing and retention is exactly the kind of place value evaporates unowned. If any of this resonates, our diagnostic maps your entire growth funnel and shows you where the real leverage sits. No deck. No pitch. Just clarity on where the engine is misfiring.

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Jonathan Stanton-Humphreys is Founder and CEO of Revenue Engine. He spent a decade as a commercial executive in B2C and B2B tech, and built Revenue Engine after watching revenue leak through strategic and implementation dysfunction, and the joins that nobody owned.

FAQ

Why did MyFitnessPal put the barcode scanner behind a paywall? To convert free users to Premium as subscriptions became the core business. The trade: an immediate ARPU lift from committed users against friction on the exact loop that turns new users into committed ones. The first half of that trade shows up in the next quarterly review. The second half takes years, and arrived wearing a competitor's logo.

How much did MyFitnessPal pay for Cal AI? Undisclosed. Market convention for profitable consumer apps runs 2-4x revenue, and strategic urgency can push past 4-7x ARR. On Cal AI's reported run rate, credible estimates start in nine figures. Treat any specific number you read as an estimate, including ours.

What should a consumer app keep free? The loop that forms the habit. Price the intelligence built on top of the loop: insights, plans, coaching, planning. Free users who log daily are not a cost centre; they're your conversion pipeline mid-formation.