AppLovin Is Going Public — Here’s What You Need To Know
Isadora Teich wrote this article
It’s incredible how much the world has changed.
Fifteen or twenty years ago, it was considered strange and dangerous to meet people online.
Now, the company behind Tinder, Match, is a profitable publicly traded company trying to expand internationally. Apps have infiltrated culture, business, lifestyle, and more on every level.
In the past year or so, numerous companies that started as scrappy startups have boomed into culture-defining apps that you can find not only on the phones of most Americans, but in the NASDAQ.
What is AppLovin?
AppLovin is a mobile technology company based in Palo Alto, California. They were founded in 2012, and as of 2020 are worth over $1 billion.
They are an app dedicated to helping other businesses grow via mobile apps. They use machine learning and predictive algorithms to connect the right users with the right apps.
AppLovin offers a variety of marketing and monetization tools.
On top of this, it also has its own series of mobile apps. This includes over 200 free-to-play games run by a dozen different studios. According to their S-1, these apps have 32 million active users a day.
AppLovin Is Growing Fast
This month, AppLovin released their S-1 filing. This means that they are on the way to joining the stock market as a publicly traded company. This filing reveals a fast growing, cleverly-scaled company that has continued to thrive, even in the midst of the global instability brought on by the pandemic.
Interestingly enough, this app has a little bit of an underdog story. Initially, it was rejected by VC after VC. Now it is a large company, worth over $1 billion. So, when it joins the public market, everyone will be paying attention. TechCrunch has already done a deep dive into their released S-1 filing.
When you look at pure numbers, it is undeniable that AppLovin has some serious power and potential. It grew 106% between 2018 and 2019 and then 46% between 2019 and 2020. While growth slowed, it is still undoubtedly a fast growing company with diversified offerings.
Apps Are Turning Into IPOs Left And Right, Why?
Long before the pandemic, we were on the way to apps dominating more and more aspects of life. If you want to learn more about the specifics of these trends, check out our blog post.
Pandemic lockdowns and social distancing guidelines led to more people being stuck at home, maybe even alone, looking for ways to stay entertained.
Large numbers of people have taken up mobile gaming, turning it into a fast growing industry and creating an appetite for mobile gaming company IPOs.
AppLovin’s IPO prospectus reveals that the company grew 46% to be worth $1.45 billion in 2020. This outpaces even the incredible spike in growth of the mobile gaming industry itself. The gaming industry, in comparison, grew only 26%, according to research group Sensor Tower.
How Much Will Their IPO Raise?
AppLovin filed for an IPO in the beginning of March.
The deal size was listed at $100 million. However, this is just a placeholder figure. It will be adjusted later and likely be much higher, considering their impressive growth, diverse offerings, and millions of daily active users.
Keep in mind that many things about their valuation are still up in the air.
We don’t know a lot of details yet. Their number of shares, price range, and possible dividend offering will all be disclosed later when they file with the US Securities and Exchange Commission.
Is AppLovin Actually Profitable?
Unfortunately, it’s not all amazing news when it comes to AppLovin.
We are currently almost in a wild west of the startup or trendy app turned IPO, and we have all heard stories of companies being valued highly due to mistakes and strange circumstances, but actually being unprofitable and facing extreme consequences.
Do you remember WeWork, the incredibly trendy and instagram-friendly global flexible workspace company that is “revolutionizing work”?
It’s failed attempt to become an IPO due to not actually being profitable in 2019 is infamous. It proved that just being cool isn’t enough. It’s actually a fascinating story, even featuring a CEO who appeared to have cult-like aspirations.
While WeWork was able to entrance investors around the world, even royal ones, people were not actually using their services.
AppLovin is the exact opposite of WeWork.
Initially panned by numerous investors and rejected by VCs, it has grown rapidly anyway.
However, in spite of this growth, it recorded a net loss of more than $120 million last year.
Putting This Profit Loss In Context
Based on this loss alone, writing the company off is not wise. Numbers don’t occur in a vacuum and tell only part of a story. However, as we have learned from companies like WeWork, it is important to look at everything a company has done, whether good or bad, and not get entranced by a glossy exterior.
AppLovin quadrupled their spending on research and development, which will likely be profitable and innovative long term.
They also recorded costs of $74.8 million on the settlement of an “asset acquisition agreement.”
AppLovin had a $7.9 million expense tied to lease terminations and write-offs as well. They have also invested over $1 billion across over a dozen acquisitions and partnerships in the past 5 years.
When Will AppLovin Go Public?
Becoming an IPO is a long process with a lot of factors and steps involved. Considering that they only filed their S-1 on March 2, it’s unlikely that we will see them on the stock market very soon.
At present, we don’t even have that much information. No one knows how much shares will cost or if there will be a dividend attached, for example.
If things go quickly, they may officially go public in Q2 of this year.
However, it is also possible that things do not progress until the end of the year, or maybe even later. A lot of this will depend on market conditions.
As the market has been incredibly volatile lately, with huge dips almost every month in 2021 so far, it’s impossible to say exactly.
The business of apps is an exciting place to be!
So much is changing and so much is possible. AppLovin is definitely an app to watch, whether you are a marketer, developer, gamer, or investor.
What do you think? Are you one of their 32 million daily users? Would you invest in AppLovin? Why or why not?
Talk to me.
About ChopDawg.com: Since 2009, we have helped create 350+ next-generation apps for startups, Fortune 500s, growing businesses, and non-profits from around the globe. Think Partner, Not Agency.
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