Yesterday, Business Insider published a story on AppLovin, the mobile adtech giant, complete with some juicy M&A speculation: could AppLovin buy Snapchat? Huh?
The report notes that AppLovin recently raised $3.5 billion through a bond sale, potentially to fund “general corporate purposes,” which could include an acquisition. It also reveals that, years ago, Snap held early-stage, informal talks about acquiring AppLovin. Now, the roles may be reversing, with speculation that AppLovin could consider acquiring Snap instead.
AppLovin, with its suite of apps and the MAX Exchange, could gain significant value by adding a popular, video-focused social app like Snap to its portfolio. Snap’s inventory and data would likely appeal to AppLovin’s roster of performance advertisers.
For now, this remains purely speculative, and according to the Business Insider report, AppLovin has downplayed any immediate plans for M&A. Even so, the market responded positively to the idea, with Snap seeing a noticeable uptick in its stock price.
Why This Matters:
Business Insider’s report provides valuable context on why AppLovin is so attractive to the market right now. Seemingly emerging out of nowhere, the company has surged in popularity among DTC performance advertisers seeking alternatives to Meta. This momentum has propelled AppLovin past The Trade Desk as the leading non-Big Tech adtech company, with a skyrocketing valuation and even more potential due to its growing influence in e-commerce and gaming.
However, there are some transparency concerns, as highlighted in a recent LinkedIn post and echoed in Business Insider’s coverage, where some advertisers describe AppLovin as a “black box.” (But do performance-driven brands care all that much?)
To be clear, some of this may simply stem from a “fear of the unknown,” as people are quickly learning more about the company amid a massive spike in its influence and scale.
Experts React:
Our Take:
AppLovin’s meteoric rise–surpassing a $105 billion market cap and a 670% increase in its share price this year–has turned heads and raised some eyebrows. Hey, that’s adtech for you. First it’s praise, then it’s receipts. That’s healthy!
Now, AppLovin faces the classic albeit somewhat anxiety-inducing challenge of any breakout business: proving its remarkable growth is built to last.
