Mobile ad network and Indian unicorn InMobi paid $90 million for mobile video monetization platform AerServ in a bid to build a header bidding solution for apps.
The deal, announced Wednesday, will bring together their respective programmatic exchanges to create “fair auction dynamics for in the in-app space,” said Abhay Singhal, InMobi’s CRO and co-founder.
“Our publishers have been asking for this,” Singhal said. “They want more control rather than the black box they get from most of the large in-app mediation platforms.”
Although header bidding has become de rigueur for desktop, most mobile app publishers still rely on a waterfall setup.
That’s only natural, Singhal said. The in-app environment presents unique challenges to creating a unified programmatic auction, including the need to run auctions through software development kits (SDKs) rather than headers, which don’t exist in apps.
“We’re seeing an evolution,” Singhal said. “Almost anything that gets developed in this industry comes to the mobile web ecosystem first, and then we see it come to apps.”
InMobi kicked the tires on seven or eight mobile supply-side platforms in multiple markets, including the US, France and China, over a nearly four-month period before settling on AerServ.
Abhay and his team were won over by AerServ’s diversity of demand and open approach to the auction.
InMobi is already in the midst of consolidating its SDK with AerServ’s SDK, and it plans to have a fully merged product on the market by the end of Q1 or early Q2.
AerServ’s SDK is integrated with 2,000 mostly US-based publishers, which overlap by about 50% with InMobi’s publisher base.
All of AerServ’s roughly 65 employees will join InMobi’s 900. AerServ CEO Josh Speyer will help lead the combined programmatic exchange business in the US and globally.
InMobi also wants AerServ to help bolster its mobile video ad offering, especially in APAC, where the opportunity is ripe. More than 30% of InMobi’s business in China is programmatic at a $300 million annual run rate. The two fastest-growing units are video and native.
“Our companies complement each other,” Singhal said. “[AerServ’s] team has unique DNA in running a mediation product, which we don’t have, and we have a global footprint across Asia and Europe, which they don’t have. We can help them get a seat at the table in these regions.”
AerServ’s employees will continue working from the California-based company’s three offices in San Francisco, Irvine and Los Angeles. Founded in 2013, AerServ was primarily bootstrapped, with seed and angel funding of about $2 million.