Liftoff Mobile, a performance marketing and monetization solutions for apps and games, went public last week at a $3.83 billion valuation. Today’s valuation is $4.5 billion, and that suggests investors have confidence in the company.
This is why the Blackstone-backed company was able to raise $437 million. I interviewed the COO, Andre Tutundjian, about the company he runs alongside CEO Jeremy Bondy. The company is trading under the ticker symbol LFTO. He surprised me by saying he was a “huge personal fan” of my work over the years and that he is a massive gamer.
Tutundjian was an analytics expert at Cie Games and Scopely. Then he founded AlgoLift back in 2016. AlgoLit focused on a machine-learning marketing optimization platform that ensures the money that app and game companies spend on performance marketing is done with intelligence.
Liftoff and Vungle acquired AlgoLift back in 2020, and Tutundjian has been along for the ride, becoming COO in 2023. I covered the event when Liftoff and Vungle merged to form a performance marketing and monetization company. And so it is interesting to see him celebrating in the picture at Nasdaq’s headquarters in New York.
Yet Liftoff itself doesn’t seem like it’s well known in the game industry, even though roughly half of its customers are mobile game companies.Liftoff has 878 demand-side customers who have 1.4 billion daily active users. It has 167,000 active SDK apps and high publisher retention.
“The success of our advertisers’ games plays a significant role in maintaining and increasing our revenue,” the company said in its SEC filing. If the game industry goes into a huge funk, then Liftoff may have a hard time, according to the risk factors of the industry. But Liftoff’s IPO suggests that things may not be as dire in the mobile gaming part of the industry after all.
Liftoff Mobile tried to go public earlier but pulled the deal back in February on account of a tough IPO market. Now conditions have improved, at least somewhat, and business is starting to get back to normal despite the war in Iran.
“Gaming is a huge part of what we do. Gaming was really the first trailblazer in this mobile app ecosystem to really get the economy going, but Liftoff was built from the beginning to be an index of the app economy,” Tutundjian said in our interview. “We have an underwriting algorithm that looks for highly valuable customers across the entire app ecosystem. So while gaming is a massive part of what we do, the evolution of the app economy, and how a lot of new sectors and verticals are coming into the app ecosystem, is really where we also shine as well.”
Tutundjian said Liftoff solves two major problems in the app ecosystem, whether you’re an app developer who has daily active users and you’re looking to show them ads and monetize your user base, or you’re an advertiser that’s looking to drive new users into your ecosystem.
“We sit right in the middle there, but the real differentiator is that we don’t focus on any one vertical,” Tutundjian said. “We focus on all verticals, and we really pride ourselves on our ability to deliver value regardless of what type of app you have.”
I noted that the whole mobile economy was thrown for a loop in 2021 when Apple switched gears and favored privacy over targeted advertising. Apple retired the identifier for advertisers (IDFA), and a lot of companies were lost at sea when it came to game and app discovery. Liftoff helped companies find their way again.
“Being able to navigate the privacy changes from iOS has been a real strength of Liftoff, and it really separated us at that period of time [from competitors],” he said. “We really found a way to continue to deliver value and find great users for our customers, while being privacy centric and adhering to all the privacy ordinances that exist in our ecosystem. That’s really was a huge turning point for our ability to stand out in this industry and grow at a time when some others struggled.”
Liftoff will be able to pay off debt with the IPO proceeds, and that will pay off Blackstone, the big private equity firm. But Tutundjian said the IPO sets Liftoff up for brand visibility and it opens new conversations and doors. It’s possible the money could also be used for M&A or other investments, as well as reduced debt, he said.
“It brings credibility to the table to be a global name and expanding our reach in a world where maybe people don’t know us yet but will now start to get to know us,” Tutundjian said.
The company has 650 people who are globally distributed.
As for the timing, he said, “I think the broader investor community really started to understand and resonate with the concept that Liftoff is part of. It’s really fast growing mobile economy, but we’re also leveraging AI in a way that is really novel and we are delivering true profit-based outcomes with AI. We’re not using AI as research, or we’re not using AI in exploratory fashion. AI is at the core of what we do. We’re doing it very profitably and delivering value through its use.”
As far as the decision to go out in a second try for an IPO, Tutundjian said there was a lot of volatility and uncertainty in the stock market.
“We decided to take a step back and wait for calmer waters. Our business has done nothing but get stronger in that period of time. We focused internally, like we always do, continued to execute, and the broader market became more favorable. It became a great time, and so we said we’re ready to go,” Tutundjian said. “It may not be the calmest it’s ever been. Yeah, but I think it’s calmer than it was in February.”
Tutundjian said he was proud that the company has 167,000 SDK integrations and publisher apps.
“That’s 167,000 apps where we help build their business alongside them, help them create a repeatable economic model, and help be a partner in growing the app system alongside them,” he said.
For developers, he said, “Navigating the fragmentation that exists on the app stores and the app ecosystem is really hard to do as an individual company, even if you’re a massive game company, or application, or even a small mom and pop shop. It’s really hard to navigate that fragmentation.”
He said there are over four million apps on the app stores, and being able to find the right ad and the right advertiser to show is a really hard thing.
“Bringing a little bit of order into that chaos is what Liftoff does, and we empower every company to be able to augment their economics with with advertising, which is something that has become pretty ubiquitous in the space,” Tutundjian said.
Gaming is the cornerstone of the app economy
I asked Tutundjian if this IPO was good for gaming.
“Gaming is the cornerstone of the mobile economy,” he said. “As the mobile economy continues to evolve, we know that people are only using their phones more and more, playing games more and more. I think the average person uses their phone about three hours a day, but if you look at younger generations, they’re on their phone for about six to seven hours a day, and what they’re doing is pretty much everything on the phone, including playing games.”
He added, “I think the tailwinds behind mobile gaming, specifically, but mobile in general, are extremely strong, and so there’s lots of reasons to be optimistic about the future.”
Tutundjian noted that Liftoff doesn’t bet on any one vertical as an opportunity. So it doesn’t go after things like prediction markets, addiction markets, or fun markets. It straddles them all.
“We really refer to ourselves as an index on the app economy,” he said. “Where users go and what they’re using is where we’re at, and we try to provide value to our customers wherever they happen to be.”
He said that right now maybe prediction markets are in vogue and exciting, and maybe next quarter it will be something else, but in previous quarters it’s been education, it’s been fitness, it’s been finance appsa.
“Whatever it happens to be, we’re there to provide support for those customers, help them build their businesses, and we know it’s ever changing,” he said. “We don’t bet on any one specific part of the market, we truly are an index in that way.”
As far as what investors saw in the company, Tutundjian said, “We really feel more broadly that both the gaming space and the AI space, in which Liftoff sits right in the middle of, are part of a very fast growing part of their life cycle. Whereas gaming, maybe on the mobile side, was really there at the inception. It really trailblazed. A lot of new verticals are really learning from what gaming did over the past decade and are running that playbook, so there’s a ton of growth across so many vectors and verticals.”
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