IronSource said it plans to acquire mobile advertising and app monetization company Tapjoy for $400 million.
The deal is part of an ongoing consolidation trend in the mobile marketing ecosystem as growth, active investments, and industry disruption change the status quo of the industry.
Tel Aviv, Israel-based IronSource has become one of the consolidators with acquisitions of other mobile ecosystem companies such as Soomla. Ironsource said the deal will strengthen IronSource’s platform offering for app developers, and is intended to further expand its customer base in games and apps beyond games. More than half of IronSource’s business has been marketing and monetizing games, which account for the bulk of in-app purchases on mobile platforms.
San Francisco-based Tapjoy started out as an offerwall company, which enables players to make purchases inside their favorite games by viewing advertising deals. It recently has been offering surveys that people can fill out in exchange for in-app items.
“Our platform-based approach to serving app developers means we’re able to plug in multiple strategic additions to our software platform to add more value for customers,” said Omer Kaplan, IronSource chief revenue officer, in a statement. “This acquisition follows that strategy, ultimately allowing us to serve our customers in the most beneficial way possible, by growing our SDK footprint, improving our monetization capabilities, and positioning our platform as a deep and integral part of the in-app and in-game economy.”
IronSource said its customers will be able to generate more revenue with greater access to diversified advertiser demand, including through the Tapjoy marketplace. In addition, customers will benefit from complementary technology allowing app developers to enrich their in-game economies.
The acquisition is also intended to increase IronSource’s software development kit (SDK) footprint among both apps and games, growing the company’s scale in the market. In other words, it can reach a lot more developers.
“We are delighted to be joining ironSource, a leading business platform for app developers,” said Jeff Drobick, CEO of Tapjoy, in a statement. “Tapjoy’s technology powers monetization, user acquisition, and customer research for some of the world’s largest brands and app developers, with our SDK integrated on approximately 66,000 apps reaching over 1.6 billion monthly active users. As the App Economy continues to grow, we believe that ironSource is the ideal partner to further leverage our products and expertise for continued growth.”
IronSource said the deal will be financed with cash from the balance sheet. Tapjoy experienced substantial revenue growth and is expected to generate approximately $81 million in net revenues in 2021. Tapjoy is highly profitable and the transaction is accretive to IronSource in 2022. The transaction is expected to close in next six months or so, subject to customary conditions including regulatory approvals.
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