Applovin's Gaming Pivot

A story about how Applovin successfully pivoted from being a mobile ad network to becoming a major gaming company.

"They were a mobile ad network and when they were going public, their comps were not very good because most mobile ad networks were not doing very well. Even though their business was actually really good, they knew they'd keep getting compared to these low multiple other mobile ad networks.

So they executed a pivot mid-flight. They realized on their ad network, the number one advertisers are games - that's who makes the most money, that's who pays the most money on our ad network. So they thought 'why don't we just build mobile games and buy mobile gaming studios?'

They built up this mobile gaming arm that does over $2 billion a year in revenue. They started buying up these little studios, partnering with them, and building their own studio in-house. Then they would use their existing reach and their ad network to grow their own games.

They got valued much higher because they had a different story than just being a mobile ad network. They turned that into basically like $20 billion of equity value, which is insane capital efficiency since they only raised $4 million from founders and $4 million from strategic investors."