Part 1: The top tier app market, where only the strongest can play

Today Appsbuyout kicks off a six-part series of blogs: Selling your app: A guide to a successful exit. The first two posts will take you through the background of the market for app deals.
Then, we’ll give you the full low-down of the options you have when you’re ready to sell your app, what practicalities to consider and what to expect. Everything you need to know to make a successful deal for your app.


Everyone’s heard about the huge app deals, but few companies can command such high price tags. For every $1 billion Instagram acquisition, there are thousands of smaller app deals, which even combined would not reach that heady price.

The top-flight market is reserved for a small number of apps which are wildly successful with users, have innovative technology, or both. Typically, the buyer is acquiring a company with staff rather than a stand-alone app. Even British teenager Nick D’Aloisio’s much-discussed sale of mobile news app Summly to Yahoo for $30 million in 2013 included some Summly staff.

Traditionally, the buyers in the biggest deals have been giant tech- and online players – e.g. Google, Facebook, Microsoft – but increasingly, other types of companies are also getting in on the act. As mobile becomes an important part of a company’s portfolio in many sectors, many choose to acquire rather than develop in-house.

There are three main reasons why companies make these big-ticket acquisitions:

  • To acquire specific capabilities or expertise: an app may be bought and swiftly closed down to integrate the functionality and technology into the buyer’s own offer
  • To add a user-base, remove competition and extend their remit
    • Facebook’s takeovers of WhatsApp and Instagram can be seen in this light – they are only slowly getting pulled closer to Facebook itself.
  • To broaden their portfolios by adding mobile apps or app-centric businesses. This is the case when non-tech companies swoop in:
    • This includes sports apparel company Under Armour’s fitness app buying-spree over the past year, as well as children’s toy- and entertainment-brand Spin Master’s acquisition of top children’s app developer TocaBoca in April, 2016.
    • ‘Mainstream’ companies are also taking stakes in companies which use apps to drive business. In the automotive sector, Daimler bought 60% of Taxi app Hailo in July, 2016, in order to merge it with MyTaxi, which it had previously acquired. This followed investments by General Motors in Lyft and by Volkswagen in Gett. These are all taxi or rideshare companies where apps are the main channel to market.

But what about the vast majority of apps which won’t command this kind of price tags? Next time, we’ll look at the market for lower-tier apps, which works very differently. It is more humble, but nevertheless thriving. In the meantime, we’ll leave you with an overview of some of the very, very, big deals for apps we’ve seen in recent years.

Some of the very big mobile app deals


Click on the infographic to see the market of the top tier app deals.

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