AppLovin, the mobile game company with hits such as Matchington Mansion and Wordscapes, raised $ 1.8 billion in an initial public offering, giving it a market cap of $ 28.6 billion and in made one of the biggest public debuts of the year.
The company, backed by private equity group KKR, has established itself as a leading player in mobile gaming in part through numerous acquisitions and has enjoyed a boom in usage over the past decade. pandemic.
It owns and operates over 200 games itself and also sells access to its marketing software to other developers, making it easier for them to monetize their apps.
The company priced its shares at $ 80 ahead of its Nasdaq listing on Thursday, according to the regulatory filing, the midpoint of its previously set range of $ 75 to $ 85. The issue price gives it a market value several times higher than the $ 2 billion that KKR bought a $ 400 million stake three years ago.
The private equity group was selling 2.5 million shares in the offering, according to the regulatory filing, but kept a stake of $ 8.6 billion. KKR will also retain 67.4% of the voting rights of the company.
AppLovin said its revenue reached $ 1.45 billion last year, up 46% from 2019, although it lost $ 126 million from net profit of 119 million dollars the year before. In its prospectus, AppLovin said it increased annual revenue growth from 2016 to 2020 by 76%.
Several other game companies have rushed to exploit public markets after the pandemic brought them a windfall of new users and despite uncertainty about their prospects, with many countries lifting restrictions on in-person activities. Pre-Teens Favorite Roblox joined the New York Stock Exchange last month and Israeli mobile game developer Playtika was listed on the Nasdaq in January.
In addition to an expected slowdown in growth, the industry is also facing headwinds due to stricter advertising and privacy rules than Apple is. planned integration in its app store in the coming months.
These changes represented “the biggest challenge” for the mobile gaming industry at the moment, said Craig Chapple, a strategist with the Sensor Tower research group, but said that AppLovin may be in a better position to handle them because of its dual source of revenue from operating games and sell its development tools to others.
Morgan Stanley, JPMorgan, KKR, Bank of America and Citigroup led the offer.