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This company raised $4 million in funding and just sold for $1.4 billion

AppLovin sold to Orient Hontai Capital. It’s the second huge Chinese ad-tech deal in two months.

Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Have you guys heard of apps?

They’re big! Really big. Ask AppLovin, a five-year-old startup that helps app developers find new customers: It just sold itself to China’s Orient Hontai Capital in a deal that values the company at $1.4 billion.

Most of you skip right over stories about ad technology, with good reason. But this one is worth paying attention to for a few reasons:

  • The deal is an astonishing win for AppLovin CEO Adam Foroughi, who raised less than $5 million in outside backing for his company. And it’s a great win for the handful of investors who did back him, including Yahoo chairman Maynard Webb.
  • The deal is the second giant Chinese ad-tech purchase in the last few months. In late August, a consortium of Chinese investors bought for $900 million. That deal was a jolt for the ad-tech industry, which has been a turnoff for investors in recent years. So imagine what this one will do. (Also imagine the smiles at LUMA, the boutique investment bank that has carved out an ad-tech niche and worked on both of these.)
  • The deal points out that even though many users may have burnt out on appshalf of U.S. mobile users download zero apps a month — there’s still enormous interest in the app market. In fact, consumers’ resistance to new apps can be good news for startups like AppLovin, which promise app developers like Pandora and King — the company behind Candy Crush — they can get their apps in front of the right people, at the right time, and/or “re-engage” users who have already downloaded an app but haven’t used it in a while. It’s also good news for Facebook and Google, which are making a lot of money in the app ad business.

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