AppLovin has struck again.
Bloomberg scooped late Wednesday afternoon that AppLovin is on the cusp of acquiring mobile app attribution startup Adjust for $1 billion.
The news was confirmed by AppLovin in a press release. [Read the release].
AppLovin is an app marketing platform that helps advertisers automate their user acquisition and re-engagment campaigns. Adjust, which closed a $227 million funding round in June 2019, is a Berlin-based startup with app-focused products and services that range from mobile measurement and marketing automation to fraud prevention and cybersecurity. It has 16 offices around the world and more than 500 employees.
More than 40,000 apps use one or more of Adjust’s solutions.
But why acquire an app tracking and attribution company weeks before the entire app ecosystem is about the change thanks to Apple’s new privacy framework for iOS 14?
According to Adjust’s help center, the latest versions of its SDK offer support for “key parts of Apple’s iOS 14 update,” including an “enhanced number of data points that are used for probabilistic matching to attribute installs from clicks when the IDFA isn’t available.”
It’s a risky approach, considering Apple’s iOS 14 documentation clearly states that fingerprinting is a nonstarter.
And there’s also the question of Adjust’s independence, although AppLovin said that Adjust will retain its brand and culture and continue to operate as a distinct company.
“Measurement, much like a referee in a sports game, must be independent,” said Charles Manning, CEO of Kochava, one of Adjust’s competitors. “Adjust owned by Applovin removes their independence.”
Regardless of these potential risk factors, AppLovin has been sitting on a mountain of cash, which it’s not been shy about spending.
In 2018, Chinese private equity firm KKR bought a $400 million minority stake in AppLovin, which raised the company’s valuation to roughly $2 billion.
A few months later, AppLovin bought in-app header bidding solution MAX followed in 2019 by SDK management platform SafeDK. AppLovin has also made a series of strategic investments in game studios over the past few years, including PeopleFun, Clipwrire Games, Geewa and Supercell-backed Redemption Games.
On top of that, AppLovin has built its own in-house game publishing division called Lion Studios that helps shepherd developers through the game development and monetization process.
But AppLovin’s biggest acquisition so far – and by far – was in May of last year when it bought gaming giant Machine Zone.
At the time, an AppLovin spokesperson told AdExchanger that part of the rationale behind the MZ acquisition was for AppLovin to continue being “one of the fastest-growing mobile game companies in the world.”
“We are also a leading monetization and marketing platform for game developers everywhere,” the spokesperson said.
It now appears that vision extends to mobile measurement with the acquisition of Adjust.
“Adjust’s product-first approach to the attribution and analytics space is comparable to how we built AppLovin,” Adam Foroughi, AppLovin’s CEO and co-founder, said in the release. “Together, we believe we will propel marketing tools innovation forward for mobile app developers globally.”
It’s unclear whether the Adjust deal, which is still subject to regulatory approvals, will be in cash, stock or a mixture. Adjust’s total funding is $250 million since 2013.
AppLovin did not respond to a request for comment and Adjust declined to share one.