The money comes as investors cool on apps and advertising tech.
AppsFlyer, a Herzliya, Israel marketing technology platform for apps, has raised $56 million in Series C funding led by Qumra Capital, with Goldman Sachs Private Capital Investing, Deutsche Telekom Capital Partners, Pitango Growth and existing investors participating. The company did not disclose its valuation.
CEO Oren Kaniel co-founded the company in 2011 when he noticed that app makers and the burgeoning market for app install ads had little in the way of measurement tools. “I basically saw spray and pray,” he says. “Marketers spraying budgets and hoping for the best.” AppsFlyer measures the effectiveness of app-install ads, as well as any traffic coming to a specific app, be it via organic Facebook post, QR code, user invite, or email marketing. The company’s software development kit has been installed on more than 2.5 billion unique smartphone devices, which it estimates includes 98% of smartphones. Revenue is tripling each year.
Two macro trends that make this deal interesting to me:
- Mobile advertising has essentially become a Facebook-Google duopoly. That has hurt investor appetite for all manner of advertising technology.
- The narrative for the past few years has been that apps are dead. The average American downloads zero apps a month. Social apps like Facebook, Facebook Messenger, Slack, Snapchat and others are increasingly trying to suck the entire Internet into their little app worlds.
On the first point, Kaniel says Facebook and Google cannot provide advertisers with “unbiased” measurement data on their ad performance because they don’t have a full picture of the data. “The average marketer uses 50 different sources. [Facebook and Google] don’t know if [the customer] saw something on other platforms,” he says. But Kaniel agrees other ad-tech providers are facing a reckoning. “Some of these companies got used to getting paid for nothing,” he says. “For the first time, they are measured on value and not how many people they annoyed today.”
On the second point, Kaniel says AppsFlyer’s data shows that app installs and app usage is actually increasing. App growth may have slowed in the U.S. but that’s not the case in Asian countries where mobile device adoption leapfrogged that of the PC, he says. AppsFlyer, which has 240 employees, plans to use the new capital to expand in Asia and to explore M&A opportunities.