British digital marketing services firm XLMedia has acquired Israel’s DAU-UP, which helps game companies acquire mobile users more profitably, for $19 million in cash and stock.
Publicly traded XLMedia, based in London, said the acquisition of DAU-UP (formally known as ExciteAd Digital Marketing) will help it diversify its holdings and immediately boost its profits. DAU-Up recently announced it was entering the competitive market for acquiring new users with a platform that is aimed squarely at mobile-game companies. User acquisition is one of the toughest tasks for mobile games in an age where players churn through products rapidly. Companies that get it right, such as Finland’s Supercell, maker of the No. 1-ranked Clash of Clans, can reap huge benefits.
DAU-UP’s Mobile Gamer User Acquisition Solution helps a game company get new players via mobile media. Since 2011, DAU-UP has been providing game promotion tools to a number of developers, including Playtika, Social Point, and Plarium, via Facebook media. Recently, it opened the solution up more broadly on multiple mobile-media channels. That matters because mobile-game revenue is growing at about twice the rate of other game categories.
XLMedia will pay $12 million in cash now and make two additional payments totaling $7 million, based on performance over a two-year period.
DAU-UP has direct access to Facebook’s applications programming interface, and it optimizes campaigns to deliver the best players for each game. The company supplies developers with the capability to create marketing campaigns via all mobile media channels optimized for their key performance indicators (KPIs). That helps developers get the right players with a focus on engagement, monetization, and maximum return on investment.
Market researcher Newzoo says that mobile games will be about 34 percent of all game revenue in 2017, up from 23 percent last year. For the 12 months ended June 30, DAU-UP generated revenue of $12.8 million and profit of $3 million before taxes.
DAU-UP was established in 2010, is based in Israel and employs 27 staff. XLMedia went public in March with the goal of diversifying and consolidating the fragmented market for mobile monetization.
Ory Weihs, CEO of XLMedia said in a statement, “We are delighted to be announcing the acquisition of EDM, our largest transaction since listing in London. One of the main reasons behind our IPO was to enable the group to act as a consolidator in highly fragmented markets. Since listing, we have been working hard to execute such deals and are therefore excited to conclude the acquisition of EDM, a global leader in the social and gaming marketing arena.”