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Developer Tools: 2014 M&A review

Chris Eleftheriadis · March 16, 2015

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.

mergers-acquitions-2015

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 Facebook 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 Twitter Jun 2014 $100M
Appurify Mobile testing platform Google 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 Google 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:

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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.