On Monday, on-device media technology company Digital Turbine bought app monetization platform Fyber for $600 million.
Digital Turbine has become one of the most prolific acquirers of mobile ad tech over the last two months – beginning with its $400 million acquisition of mobile ad network AdColony in late February, followed by its early March purchase of mobile DSP Appreciate for $22.5 million in cash.
Fyber, its third acquisition, is what Digital Turbine’s EVP of corporate development Matt Tubergen calls a “cherry on top” of the company’s vertical integration strategy across distribution, engagement and now monetization.
“We’re marrying the world of app developers and brands with carriers and OEMs,” Tubergen said. “And because we enable the apps and content on all of these devices, we can bring in monetization, service and technologies for the apps we either preload or enable through our partners.”
Digital Turbine’s business is centered on helping app creators and advertisers forge relationships with mobile carriers and device manufacturers. Ignite, Digital Turbine’s device management software, is installed on more than 400 million mainly Android devices, although its iPhone footprint is also starting to grow.
The company, which went public in 2013, has seen its stock go up more than 2,000% over the past year.
AdExchanger caught up with Tubergen and Offer Yehudai, president of Fyber and co-founder of Inneractive, the mobile SSP Fyber acquired in 2016, to talk about Digital Turbine’s vision, the impact of iOS 14 and what’s next for Digital Turbine on the M&A front.
On the rationale behind buying Fyber.
MATT TUBERGEN: Fyber has three components that fit nicely into and have a set place in our overall ad tech strategy.
First is their exchange, which is growing very fast. Then there’s mediation, which is a smaller part of their business, but also growing quickly and will help the publishers that we preload onto devices to manage their monetization. And, third, is their offer wall. That’s a legacy business, but the ability to cross promote and recommend apps, content and services is helpful for the telcos we integrate with.
On how Fyber fits in with Digital Turbine’s other newly acquired assets.
OFFER YEHUDAI: Digital Turbine has unique on-device technology and carrier and OEM relationships, AdColony gives us access to brands and agencies and Fyber brings access to supply – especially gaming supply – and to performance in the programmatic marketplace. The combined vision is about bringing these assets – carriers, brands and programmatic – together.
TUBERGEN: Video is also growing rapidly for us, especially with the emergence of 5G, and now that we have access to both supply and demand, we can help carriers and OEMs that want monetization services, including video.
On whether Digital Turbine plans to continue its buying spree.
TUBERGEN: I do believe that we’re just getting started, but now we’re going to take some time to make sure we have a thoughtful approach so that we can support all three companies [AdColony, Appreciate and Fyber].
Each business is profitable and growing at a fast clip on its own. Fyber, for example, saw preliminary revenue results for January and February that were 40% higher than the planned guidance for 2021.
On the impact of iOS 14.
YEHUDAI: Even before this deal, Fyber has been actively advocating a move to contextual targeting. Apple’s intentions here are very clear, so we say don’t fight it, join it. But we don’t look at this as only an iOS-only problem – it’s a mobile issue. Everything we’re building on the contextual front for iOS we’ve also built with Android in mind so that when Android IDs eventually go away, we have an offering there.
On Fyber’s multiyear turnaround to become a profitable company.
YEHUDAI: We just finished a multiyear turnaround this year. Fyber is the merger of four companies that were brought together into one gaming-focused programmatic platform. When Fyber acquired Inneractive [in 2016], we joined Fyber’s management team and looked at what we’d inherited: a company that cost more than $15 million a year to run with debt of over $200 million in the form of convertible bonds that had to be repaid.
We focused on staying independent and being transparent. All of our demand is programmatic, so publishers can see the creative, who buyers are and what they’re paying. We also rebuilt FairBid, our header bidding platform for mobile apps.
We went from four companies that were losing money with huge debt into one profitable company growing year over year with debt repaid and converted, and we continue to grow.
Although we can’t make any forward-looking statements, because Digital Turbine and Fyber are both public companies, I can say that together, looking backwards, we have around $1 billion in revenue.
This interview has been edited and condensed.