AppsFlyer, a mobile ad analytics company, is in advanced talks to be acquired by a private equity firm for between US$3.5 billion and US$4.5 billion.

The company, founded in 2011 by Oren Kaniel and Reshef Mann, employs about 1,300 people and reports annual revenues of around US$400 million.

AppsFlyer enables app owners to track which ad channels bring the most profitable users.

Goldman Sachs has been hired to advise on the sale process.

The company has not raised new funding since 2020, when it was valued at US$2 billion.

AppsFlyer has made several acquisitions in recent years and counts General Atlantic, Salesforce Ventures, and Goldman Sachs among its investors.

The company laid off about 100 employees, or 7% of its workforce, earlier this year.

AppsFlyer declined to comment on the reported negotiations.

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🔗 Source: Calcalist

🧠 Food for thought

1️⃣ Strong unit economics drive premium valuations even in cautious markets

AppsFlyer’s potential $3.5-4.5 billion valuation represents a compelling growth story that demonstrates how profitable SaaS companies can still command premium multiples.

The company’s revenue tripled from its 2020 funding round while maintaining profitability, suggesting the business generates around $400 million in annual revenue with strong unit economics.

This 1.75-2.25x revenue multiple reflects the premium that buyers place on profitable, growing companies in the current market environment where profitability has become paramount.

The timing aligns with private equity’s renewed interest in mature tech companies that have proven their business models, particularly those with recurring revenue streams and positive cash flow.

AppsFlyer’s decision to engage Goldman Sachs rather than pursue the IPO they were considering last June signals management’s recognition that private markets may offer better valuations than public markets for profitable growth companies.

2️⃣ Mobile attribution market consolidates as privacy changes reshape competitive landscape

The potential acquisition comes as the mobile attribution industry faces significant headwinds from privacy regulations and platform changes that have disrupted traditional measurement methods.

AppsFlyer operates in a market where nearly 25% of mobile app installs were historically fraudulent, creating demand for sophisticated attribution technology that can differentiate legitimate users from fake ones1.

The company’s recent 7% workforce reduction to invest in AI capabilities reflects the industry-wide shift toward using artificial intelligence to maintain measurement accuracy as traditional tracking methods become less reliable.

This strategic repositioning around AI aligns with broader tech industry trends, where companies are cutting costs in traditional areas to fund AI development.

The acquisition would likely accelerate AppsFlyer’s AI investments while providing the scale needed to compete with larger platforms like Google and Meta that have integrated attribution capabilities directly into their advertising systems.

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