The merger will create one of the largest independent mobile app and game growth platforms and target user acquisition, engagement, monetization, and analytics.
Liftoff CEO Mark Ellis will lead the combined company as CEO, while Vungle CEO Jeremy Bondy will assume the role of president. The transaction follows prior majority investments in both Liftoff and Vungle from private equity funds managed by Blackstone. Blackstone acquired a majority stake in Vungle for more than $750 million two years ago, and in December Blackstone said it was investing nearly $400 million in Liftoff.
“It’s actually very complementary. Liftoff is on the demand side, and Vungle is on the supply side,” Ellis said in an interview with GamesBeat. “We are complementary in terms of technology, headcount, and pretty much any way you look at it.”
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Liftoff and Vungle currently operate as complementary partners within the marketing ecosystem, each with years-long track records of delivering solutions aimed at making mobile apps and games successful.
“We had our longer-term strategic vision of how things would play out, and we were on our way to building a broader, more expansive platform to combine all that we were already doing on the demand performance side of things,” Ellis said. “And based on some market dynamics, there’s a real inflection point and opportunity to scale more quickly and really bring supply and demand together. So with that in mind, we then practically put our heads together and worked on the merger.”
Ellis said the combined platform enhances capabilities for mobile developers and enterprises to build, advertise, and monetize their apps. He said both companies are privacy-centric and “thoughtful with the type of data we collect and how we go about partnering.”
An industry wave
Ellis noted that mobile marketing and monetization businesses are going through a consolidation, with many companies integrating vertically, as evidenced by Zynga’s purchase of Chartboost.
“We thought it was very advantageous to join forces and bring the two companies together,” Ellis said. “We’re forming a leading independent mobile growth platform. And this merger will create one of the largest independent, privacy-friendly platforms that really fuel the entire mobile app growth cycle. And by that, I mean from user acquisition to engagement to monetization analytics.”
Liftoff’s technology enables mobile app marketers to acquire and retain high-value users at scale by delivering more than 2 billion ads each day across more than 550,000 mobile apps in over 140 countries through advanced machine learning, prediction, intelligence, and creative optimization capabilities.
Vungle operates one of the largest and most diverse mobile monetization platforms, with over 100,000 direct software development kit (SDK) integrations across leading mobile app publishers and 15,000 individual content creators across its influencer marketing platform. This is in addition to a broad suite of capabilities across user acquisition, creative technologies, and content analytics.
The strategy is to create an end-to-end platform that improves the effectiveness of mobile advertising and provides greater scale and enhanced capabilities for mobile developers to build, advertise, and monetize their apps. The merger will accelerate key growth initiatives for both companies.
Alternative to big tech
Ellis said competitors include tech giants like Facebook and Google, which are very good at marketing mobile apps and games. But he said many of Liftoff and Vungle’s customers want alternatives so they won’t be as dependent on the tech giants.
“Our competition is Big Tech: Google, Facebook, and others. And so in that regard, we certainly are closing the gap, but they are still considerably larger,” Ellis said. “Obviously, they have a more varied set of products and businesses than we do. But I think the industry is really hungry for a skilled alternative to what Google and Facebook and others offer. They offer very compelling products as well. But with that comes their own agenda and biases, and so we welcome the opportunity to continue to help in a very competitive manner.”
Ellis said the combined company can address the complete mobile app growth cycle, from app design and development to marketing, measurement, and monetization.
The transaction underscores Blackstone’s investor focus on digital advertising technology and content and follows other investments led by its flagship private equity funds. These include investments in Simpli.fi, Ancestry, Bumble, and Hello Sunshine. Blackstone will continue to actively support the combined company as the majority shareholder.
Liftoff was founded in 2012 and is based in Redwood City, California. Vungle was founded in 2011 and is based in San Francisco. Each company has about 350 employees, and Ellis said the merged company will keep all the staff and will likely hire for new positions.
The combined company doesn’t have a name yet, but Liftoff and Vungle products will likely retain their names. Ellis said both companies are currently profitable.
The transaction is expected to close at the end of September. Simpson Thacher & Bartlett and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian served as legal counsels on the transaction.
“It comes at a time when there’s a real opportunity in the market to be that independent, unbiased platform,” Ellis said.
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