Everything seemed to be going well for mobile marketing firm AppLovin at the end of last year. The company agreed to be sold to private equity firm Orient Hontai for $1.4 billion in September 2016, but more than a year later the deal is no longer on the table. While AppLovin is once again officially unattached, it’s not going away without a consolation prize: Orient Hontai is backing the company to the tune of $841 million in debt financing.
AppLovin wouldn’t comment on why it or Orient Hontai withdrew from the deal, instead referring VentureBeat to its blog post for more details.
Officially launched in 2014, AppLovin competes alongside not only third-party marketing firms like InMobi, Kiip, and Millennial Media but also larger entities, such as Twitter’s MoPub, Facebook, and Google. And it’s been pretty successful, having achieving unicorn status in Silicon Valley and only being largely bootstrapped for the past three years.
While the lack of an exit may be disappointing for AppLovin employees, Orient Hontai remains a staunch financier of the company. Today’s $841 million investment is on top of the $140 million invested at the beginning of this year, when Orient Hontai gained a 9.98 percent stake in AppLovin. While there was no disclosure about how much more of an equity stake Orient Hontai took with this latest infusion of cash, AppLovin has received nearly $1 billion in debt financing, in total.
While we may never know the details surrounding the tabled deal, Reuters reported that it was modified as the result of scrutiny from the Committee on Foreign Investment in the United States (CFIUS,) which examines these type of deals to protect national security.
So Orient Hontai apparently wants to keep AppLovin solvent (although that doesn’t seem to be a problem) until the time is perhaps right to renegotiate a purchase offer.
Meanwhile, AppLovin said that 2017 was a “record-breaking” year for the company, though it declined to share specifics.