NEW YORK (Reuters) – AppLovin Corp, the U.S. mobile marketing firm backed by private equity firm KKR & Co Inc, said on Thursday it has invested in several gaming studios, as it adds to its library of games ahead of a potential initial public offering.
Palo Alto, California-based AppLovin said it has acquired a stake in Belarusian game studio Belka Games, which is the creator of mobile puzzle game Clockmaker.
AppLovin also disclosed investments in PeopleFun and Firecraft Studios, the latter of which developed mobile game Matchington Mansion which has been rated more than 1 million times on the Google Play Store.
“To get to the next level, these game studios needed strategic expertise and capital which we can provide,” AppLovin Chief Executive Adam Foroughi said in an interview.
AppLovin began in 2012 as a platform for developers to promote their apps. In 2018, AppLovin began a media division, Lion Studios, to work with developers to promote and publish apps.
These deals are the first outside studios AppLovin has invested in.
Mobile gaming, comprised of smartphones and tablets, has become the largest segment of gaming, with an estimated $68.5 billion in revenue in 2019, according to a report by market research firm Newzoo.
KKR last year acquired a minority stake in AppLovin for $400 million, valuing the company at $2 billion.
The company’s projected revenue for 2019 is in excess of $1 billion.
“AppLovin is diversifying its business and broadening its market opportunity in mobile gaming and we are excited to be partnering with them on executing this long-term growth strategy,” said Herald Chen, KKR’s head of technology, media and telecom.
CEO Foroughi declined to outline a timeline for a potential IPO.
“Generally we’re focused just on execution and growth right now. We’re growing revenues and profits fast. We are profitable,” he said.
Reporting by Joshua Franklin in New York; Editing by Lisa Shumaker