Weekly News Digest #19

It’s official: Tripledot Acquires AppLovin’s Games Portfolio for $800m

UK-based casual mobile game developer Tripledot Studios has entered into a definitive agreement to acquire AppLovin’s (NASDAQ: APP) entire mobile gaming business for $800m. The deal brings 10 studios and well-known titles like Wordscapes, Hexa Sort, and Project Makeover under Tripledot’s umbrella. The transaction is pending regulatory approval and is expected to close in Q2’25.

The $800m purchase price (down from $900m AppLovin initially announced in Feb’25) consists of 50% cash and 50% shares consideration:

• $400m in cash, including: (i) $150m payable at closing; (ii) $250m secured promissory note;
• $400m in shares of Tripledot, representing ~20% ownership and implying a ~$2B valuation (40%+ increase over Tripledot’s $1.4B Series B round valuation in 2022). As stated by Tripledot’s CEO, AppLovin will have no board seat or strategic control over Tripledot.

Transaction multiples represent ~0.6x EV/Revenue and ~3.2x EV/adj. EBITDA based on run-rate Q1’25 Apps segment financials (see table below). The adjusted EBITDA multiple likely excludes stock-based compensation and some central group allocated expenses and might, hence, be slightly unrepresentative.

Source: AppLovin

The deal comes amid a wave of major transactions in the mobile gaming market over the past few months, after Scopely’s $3.5B acquisition of Niantic games, including Pokémon Go, as well as a strategic equity investment in Dream Games by CVC with additional debt financing from Blackstone and others, valuing the creator of Royal Match at roughly $4.5B.

Transaction Rationale

Over the past five years, AppLovin has evolved from a predominantly mobile gaming business into an ad tech-first company, fundamentally reshaping its revenue and margin profile. In 2020, gaming apps represented ~86% of revenue and ~65% of the total group’s EBITDA. For comparison, in LTM Q1’25, gaming apps accounted for 28% of revenue and 9% of the group’s EBITDA. 

This shift reflected a broader strategic deprioritization of AppLovin’s gaming business. After acquiring Machine Zone in 2020, the company effectively paused investment in new gaming content and M&A. The number of active studios was cut in half, from 20 to 10, signaling internal consolidation and a reduced focus on first-party development. 

A lack of new game launches, rising competition, post-IDFA user acquisition difficulties, and revenue volatility also drove the gaming division’s declining share. Gaming EBITDA margins struggled to exceed 20%, peaking only once at 22% in Q2’24 due to UA cost cuts. In contrast, the advertising segment has reached almost 80% in the last twelve months while demonstrating +70% YoY growth vs. the stagnating gaming division.

Meanwhile, AppLovin doubled down on building its ad tech platform. Through a combination of organic development and strategic acquisitions like MAX and MoPub, the company positioned itself as a leading mobile advertising infrastructure provider. Its $17.5B (rejected) bid to acquire Unity in Aug’22, along with May’25 proposal to merge with TikTok’s international operations, further underscored this strategic direction.

Source: AppLovin

The sale of the gaming division finalizes AppLovin’s exit from stagnating game operations, aligning the company fully with its high-margin, scalable ad tech business. This may support a potential multiple re-rating (ad tech business), as evidenced by stock price growth over the last three years. Following the deal announcement on May 7, AppLovin’s share price rose by 11.9% on May 8. By the end of the trading week, on May 9, the stock closed at $328.54.

Source: AppMagic

Founded in 2017, Tripledot Studios is a developer and publisher of evergreen card & puzzle games with in-app advertising (IAA) monetization, such as Woodoku, Solitaire.com, and Triple Tile. In 2022, the company raised $116m in a Series B round at a $1.4B valuation, with proceeds partially allocated to M&A. However, the company has not been among the industry’s most active consolidators. Since 2022, Tripledot acquired 2 companies, including the latest acquisition of ZephyrMobile (Jun’24), an IAA casual puzzle mobile games developer.

While this targeted approach has supported consistent performance, Tripledot’s portfolio remains concentrated in puzzle and card genres, with limited exposure to other game formats or monetization models. Recent portfolio dynamics suggest that the timing is right for strategic diversification.

For Tripledot, the acquisition of a full portfolio of operating studios — each with live games already on the market — represents a timely opportunity for:

• Portfolio diversification: Post-closing, no single game is expected to account for more than 10% of Tripledot’s total net revenue. The integration of 10 studios strengthens the company’s balance across both in-app purchase and ad-based models, expanding game types and audience reach;
• Instant scale: Upon deal closing, Tripledot will become one of the top five independent mobile game publishers by revenue, serving 25m DAU and generating ~$2B in annual gross revenue. The enlarged player base will provide more data to fuel Tripledot’s AI-driven insights and support more engaging game experiences;
• Global footprint expansion: The combined company will employ over 2,500 people across 23 cities, including new hubs in North America, Europe, and Asia. This scale fosters creative cross-pollination and supports the development of games tailored to diverse markets;
• Operational synergies: As a data-driven IAA-native publisher, Tripledot expects to improve user acquisition efficiency and overall profitability across the acquired studios by leveraging its internal marketing infrastructure, performance tools, and monetization expertise;
• Attractive entry valuation: The transaction closed at a favourable revenue multiple of 0.6x and below the initially announced valuation of $900m, allowing Tripledot to acquire a mature, revenue-generating portfolio at a favorable multiple.

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MERGERS & ACQUISITIONS

US-based investment firm Blackstone has sold a minority stake in US-based mobile app marketing company Liftoff to US-based private equity firm General Atlantic for an undisclosed sum at a $4.3B valuation. Blackstone will retain its position as the majority shareholder. The transaction is part of General Atlantic’s strategy to support Liftoff’s growth and further development of its Cortex AI platform. The deal is expected to close by mid-2025. Liftoff, which offers a mobile app marketing, analytics, user acquisition, and monetization platform, merged with Vungle in Oct’21.

US-based video game commerce company Xsolla has acquired US-based player engagement platform Ludo for an undisclosed sum. The acquisition aims to integrate Ludo’s retention solutions, including questing tools and rewards systems, into Xsolla’s Web Shop. The integration is intended to enhance player engagement, improve retention, and unlock new monetization opportunities. This transaction follows Xsolla’s acquisition of LF.Group in Jul’24, also for an undisclosed amount.

Canada-based UGC gaming studio JOGO has acquired UGC content developer RHQ Creative for an undisclosed sum. According to sources, the deal is valued at over $500k, with potential earnouts exceeding $1m contingent on performance milestones. RHQ Creative is a Fortnite map development studio known for creating six maps that have accumulated over 20 million visits and 200 million hours of playtime. JOGO’s own maps have generated a total of 400 million hours of playtime. The acquisition marks the continuation of the 2025 UGC deal spree. You can find the full list of 2025 UGC deals exclusively on our Patreon.

Canada-based game developer Zugalu Entertainment has acquired Canada-based PC & Console developer and publisher Crimson Herring Studios for an undisclosed sum. The acquisition aims to leverage Crimson Herring’s experience and development capabilities to support Zugalu’s upcoming titles. Crimson Herring will operate under the Zugalu brand, and as part of the deal, Crimson Herring’s CEO will become the COO of Zugalu.

VENTURE FINANCING

Israel-based AI game tech company Sett has secured $27m in funding across two tranches — a $12m Seed round from F2, Bessemer Venture Partners, and angel investors, followed by a $15m Series A round led by Bessemer Venture Partners, with participation from Saga VC, vgames, and Akin Babayigit, founder of Arcadia Gaming Advisors. The funding will expand the team, focusing on hiring engineers and AI specialists. Previously operating in stealth mode, Sett is developing AI agents for mobile game marketing and user acquisition, offering tools for playable ads, marketing analytics, ad testing, and optimization.

Turkey-based mobile game studio Fuse Games has secured $7m in a funding round led by Griffin Gaming Partners, with participation from Lakestar, NFX Capital, and Actera. The proceeds will be used to support company growth, team expansion, and the development of original IPs. Fuse Games is currently working on its debut, undisclosed mobile title. The company previously raised $2m in Jun’23.

Turkey-based mobile game developer Alpaka Games has raised $2.25m in a debut funding round led by Ludus Ventures, with participation from a16z Speedrun and Revo Capital. The funds will enhance production and marketing capabilities and support the development of new titles. Alpaka Games is focused on building a vertically integrated structure in the hybrid action mobile games segment, encompassing game development and publishing.

UAE-based multiplatform games developer Classy Games Studios has secured an undisclosed investment from Merak Capital and its accelerator program Exel by Merak. The funds will support the company’s growth, live operations of existing titles, and the development of new projects, including the PC-based RPG detective game SillySuspects, which is currently in development.

US-based media and gaming company Resurgens Gaming has raised an undisclosed seven-figure amount in a Seed Plus funding round. The company secured $500k from Invest Georgia, a state-backed organization, with the remainder raised from Sound Media Ventures, Phoenix Capital Ventures, The Trae Young Family Foundation, and a group of angel investors. The funds will support the growth of Resurgens Gaming’s publishing division and the Ghost Launchpad gaming accelerator launch, focusing on UGC developers building within Fortnite’s editor.

EARNINGS REPORTS