AppLovin sells to Orient Hontai Capital. It’s the second huge Chinese adtech deal in two months.
Have you guys heard of apps?
They’re big! Really big. Ask AppLovin, a five-year-old startup that helps app developers find new customers: It just sold itself to China’s Orient Hontai Capital in a deal that values the company at $1.4 billion.
Most of you skip right over stories about any kind of ad technology, with good reason. But this one is worth paying attention to for a few reasons:
- The deal is an astonishing win for AppLovin CEO Adam Foroughi, who raised less than $5 million in outside backing for his company. And it’s a great win for the handful of investors who did back him, including Yahoo chairman Maynard Webb.
- The deal is the second giant Chinese adtech purchase in the last few months. In late August, a consortium of Chinese investors bought Media.net for $900 million. That deal was a jolt for the adtech industry, which has been a turnoff for investors in recent years. So imagine what this one will do. (Also imagine the smiles at LUMA, the boutique investment bank that has carved out an adtech niche, and worked on both of these).
- The deal points out that even though many users may have burnt out on apps — half of US mobile users download zero apps a month — there’s still enormous interest in the app market. In fact, consumers’ resistance to new apps can be good news for startups like AppLovin, which promise app developers like Pandora and King — the company behind Candy Crush — they can get their apps in front of the right people, at the right time, and/or “re-engage” users who have already downloaded an app, but haven’t used it in a while. It’s also good news for Facebook and Google, which are making a lot of money in the app ad business.