Mobile game developer AppLovin is poised to become the latest online game provider to hit the public markets, joining a crop of companies to capitalize on a surge in usage during the pandemic.
In its IPO prospectus on Tuesday, AppLovin said revenue in 2020 jumped 46% to $1.45 billion. Kids game company Roblox is set to go public next week, following the debut of Israel’s Playtika in January and gaming software developer Unity in September.
According to research group SensorTower, the mobile game market grew 26% last year to $79.6 billion. With offices and schools closed down for much of 2020, kids and adults flocked to their phones, tablets and consoles for entertainment.
While AppLovin was profitable in 2019, it swung to a net loss of over $125 million last year. The company quadrupled its spending on research and development and recorded costs of $74.8 million on the settlement of an “asset acquisition agreement.” It also had a $7.9 million expense tied to lease terminations and write-offs.
Founded in 2011, AppLovin was initially focused on helping mobile apps get discovered and make money. In 2016, the company agreed to be acquired for $1.4 billion by Chinese private equity firm Orient Hontai Capital.
However, that deal fell apart the next year and turned into a debt investment. AppLovin then sold a minority stake in 2018 to KKR, which valued the company at $2 billion. Since then, AppLovin has been on a buying spree, primarily to become a force in game development.
The company created a publishing division and bought up studios, including Machine Zone, maker of Game of War: Fire Age and World War Rising. It also bought Magic Tavern, creator of puzzle game Project Makeover, and Peoplefun, developer of Wordscapes. AppLovin said in its prospectus that it’s invested $1 billion across 15 acquisitions and partnerships since 2018.
The company now has over 200 free-to-play mobile games from 12 studios, and says its apps are used by almost 32 million people a day.
AppLovin joins parade of video game companies going public after $1.45 billion in sales by 2020