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Developer Tools: 2014 M&A review
From ad networks to customer support, developer tool startups have been popping up in the last few years to help app developers write less code, reach the right users and monetise. 2014 was a year with a wealth of M&A activity with over 30 transactions in the developer tools space.
Developer tools consolidation
[tweetable]There are more than 1,000 developer tools available in the market[/tweetable], with many of them popping up from one day to the next and (some of them) quietly disappearing after a short period of time. That means there’s one developer tool startup for every 1000 apps!
Ad networks, user analytics, and cross platform tools feature prominently among dev tool startups acquired in 2014. The acquirers were typically large companies, such as Yahoo, Apple, Google, Facebook, Twitter, Unity and Microsoft, who are building up Mega SDKs with comprehensive developer tool portfolios.
The majority of dev tool startups cannot survive on their own for long and are seeking VC investment or buyouts by the larger players in the field. Developer tools need a long period of seeding the market with free products, before they can hope to see conversion to a premium tier – let alone figure out what developers are willing to pay for.
In 2013, it was backend-as-a-service tools that were a must-have developer offering and the subject of acquisitions, most notably with Facebook and Parse. [tweetable]In 2014, it was ad networks that were the prime acquisition targets[/tweetable], and with cutthroat price competition and complex landscape this is only bound to intensify. We’re also starting to see an evolution towards UI technology as a developer differentiation, with the acquisition of Form by Google which was subsequently released for free in less than 3 months.
In the table below we’ ve tracked 33 developer tool acquisitions in 2014 (let us know if there are any we ‘ve missed?)
Developer tools acquisitions of 2014:
|Company||Product description||Acquired by||Date||Acquired for|
|Sense Networks||Mobile location advertising||YP||Jan 2014||–|
|Little Eye Labs||Performance analysis and monitoring tools for Android||Jan 2014||$10-$15M|
|InsightsOne||Cloud-based predictive analytics solutions||Apigee||Jan 2014||–|
|Sparq||Mobile marketing platform||Yahoo!||Jan 2014||–|
|GetJar||Independent app store||Sungy Mobile||Feb 2014||$50M|
|Burstly||Beta testing, user analytics and monetization||Apple||Feb 2014||–|
|Cloudant||Database-as-a-service for web and mobile developers.||IBM||Feb 2014||–|
|Applifier||User acquisition SDK with video ads and game replay SDK||Unity||Mar 2014||–|
|AdMobius||Mobile Audience Management Platform||Lotame||Mar 2014||–|
|Testhub||App testing services||Applause||May 2014||–|
|Mocean Mobile||Mobile Ad network||PubMatic||May 2014||–|
|Distimo||App store analytics||App Annie||May 2014||–|
|Capptain||Push notifications and user feedback||Microsoft||May 2014||–|
|TapCommerce||Mobile ad retargeting||Jun 2014||$100M|
|Appurify||Mobile testing platform||Jul 2014||–|
|Flurry||User analytics||Yahoo!||Jul 2014||$200M|
|MobileDevHQ||App marketing||Tune||Aug 2014||–|
|5Rocks||User analytics for game developers||Tapjoy||Aug 2014||–|
|Mongoose Metrics||Call tracking technology||Ifbyphone||Sep 2014||–|
|FeedHenry||Cross-platform tool||Red Hat||Sep 2014||$82M|
|PlayHaven||Mobile gaming monetization platform||Science Media||Sep 2014||–|
|Mopay||Mobile payments||Boku||Oct 2014||–|
|Ducksboard||Dashboard visualisation technology||New Relic||Oct 2014||–|
|Firebase||Backend as a service||Oct 2014||–|
|Telerik||UI frameworks and cross platform tools||Progress Software||Oct 2014||$262.5M|
|MobFox||Mobile ad network||Matomy Media Group||Oct 2014||$17.6M|
|Tap for Tap||Promotion exchange for app developers||Pretio Interactive||Oct 2014||–|
|Corona Labs||2D game engine||Fuse Powered||Nov 2014||–|
|Appifier||Mobile App Builder||AppMakr||Nov 2014||–|
|Appia||User acquisition platform||Mandalay Digital Group||Nov 2014||$100M|
|Taptica||Mobile user acquisition platform||Marimedia||Nov 2014||$13.6M|
|Nexage||Mobile ad network||Millennial Media||Dec 2014||$107.5M|
|HockeyApp||App performance management and beta distribution service||Microsoft||Dec 2014||–|
Even though the pace of acquisitions was down slightly in 2014, as indicated by the graph below, it still remains high compared to the 2011 and 2012 levels. As our research demonstrates, developer tools are correlated with both developer experience and revenue – and as such are becoming the competitive arsenal of those that want a fighting chance in the app stores.
M&As accross the 2011-2014 period:
In 2015 we expect to see the levels of developer tools M&A continue unabated, as larger players – from ad networks to media companies – leverage developers and their apps as a user acquisition channel. And with dev tool startups competing globally for a pool of 5.5 million app developers, the cost of developer acquisition is only going upwards, and not many startups will be able to afford it.