Another unicorn rides off into the eastern sunset. App marketing company AppLovin has agreed to be acquired by a Chinese private equity firm for $1.42 billion.
“AppLovin” could also be used to describe the scene in China right now, where consortia of institutional investors have mobile fever.
This acquisition, which was confirmed on Monday after rumors first flew several weeks ago, is representative of an indisputable trend. Chinese companies have deep pockets – and an appetite for ad tech.
As Elgin Thompson, managing director of Digital Capital Advisors, previously put it to AdExchanger: “These companies will pay the full price and, in some cases, an obscene price” in a bid to fuel digital and mobile growth at home and abroad.
AppLovin’s acquirer is called Orient Hontai Capital, hardly a household name. But that’s also becoming part of the trend.
The fact that people in the West might not have heard of Orient Hontai Capital or other Chinese acquirers entering the scene just means that people in the West “have a lot of work to do on educating ourselves on who these companies are and what they’re trying to do,” said PubMatic CEO Rajeev Goel in August when a consortium of unknown Chinese players bought contextual ad network Media.net for $900 million.
And what they’re trying to do is this: mobile, mobile, mobile and growth, growth, growth.
“AppLovin is the clear leader in mobile marketing automation and consistently delivers outstanding results for their customers,” said Orient Hontai CEO Tony Ma in a release on the deal. “As the mobile market grows, AppLovin is well-positioned to herald new innovations.”
The AppLovin technology is centered on user acquisition, mobile monetization and retargeting. At base, it’s an ad network that helps advertisers tap into their existing user data in order to reach, convert and engage similar users. After acquiring a user, AppLovin keeps tracking that person for retargeting and retention purposes.
For the last year or so, video has become an increasingly large part of its business. The company has a dedicated in-house creative team that works with clients to develop mobile branded video content informed by the user behavior and engagement data it collects.
In June 2015, AppLovin CEO and founder Adam Foroughi told AdExchanger that video had become a “well over $100 million business” for the company less than a year after launching it.
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Based in San Francisco, AppLovin was completely bootstrapped and other than $4 million from a few angels, never raised any VC funding (unlike most of its peers and competitors). Clients include HotelTonight, Pandora, SeatGeek, Ibotta and Chinese utility app publisher and mobile monetization platform Cheetah Mobile
The Orient Hontai deal is expected to close before the end of the year.
Beyond Media.net and now AppLovin, a group of Chinese companies bought Opera Software’s browser business for $600 million in July after a proposed $1.2 billion deal for the whole shebang, including Opera Mediaworks, fell through. In June, mobile SSP Smaato was snapped up by an offline marketing services provider based in Beijing for $148 million. And in February, Chinese mobile ad platform Mobvista acquired app monetization company NativeX for $25 million.
