GetJar, a San Mateo, Calif.-based company that once was viewed as the king of mobile app distribution, is in the process of being acquired by Sungy Mobile Limited. Sungy, based in China, is the company behind Go for Android, an operating environment that sits on top of Android OS. Sungy is said to have paid over $50 million, according to those sources.
The company confirmed the deal Wednesday morning after my initial report Tuesday evening and disclosed that it paid $5.3 million in cash. It will “also issue up to an aggregate of 1,443,074 Class A ordinary shares to the seller of GetJar by early 2016 as earn out payments if certain performance targets are achieved.” That puts the theoretical and optimal deal value at about $35 million assuming $21 a share, though how much it will actually be is anyone’s guess. And yes, $5.3 million is clearly a lot less than what I had initially reported.
Sungy has been around since 2004, and was founded by Deng Yuqiang and Zhang Xiandong. Its investors included IDG Partners, WI Harper, and Jafco Ventures. It was famous for its mobile portal 3g.cn. In 2008 Sungy launched its apps on Android Market, including the most popular launcher on Google Play, Go Launcher. It is currently a top publisher of applications on Google Play and operates several popular mobile services in China including 3g.cn and a new e-reader service. It was one of four Chinese mobile internet companies to go public in 2013.
Sungy was originally priced at $11.22 a share following its debut on the Nasdaq in November 2013. Sungy is now trading at above $21 a share, giving the company a market capitalization of over $680 million. The company’s Go Launcher software was widely viewed as the inspiration behind Facebook’s failed Home offering. Sungy has over 325 million users, of which about 70 percent are outside China, according to company’s filings. It has about 87 million active users.
GetJar has a similar story. It was started by Lithuanian entrepreneur Ilja Laurs in his home nation in 2004. GetJar made an early bet on the app economy, but it was born in an age before iOS and Android ecosystems became juggernauts. It was an app store that focused on more classic mobile environments such as Java, Blackberry and Symbian.
GetJar went on to raise about $42 million in funding from the likes of Accel Partners and Tiger Global Management. However, the mobile economy’s center of gravity shifted to iOS and Android, and GetJar had to reinvent itself. With iOS being a closed environment, the company launched its Android store and found success with its efforts. CEO Laurs was replaced by COO Chris Dury in April 2012.
So why is GetJar of interest to Sungy? The answer is the rapidly growing number of apps in app stores. A million plus apps in Google Play store means that the world needs better discovery tools and Sungy thinks that combining GetJar’s analytics with its user base can solve the app discovery quandary. App discovery — or helping app developers get installs — can be a lucrative business, as Facebook has shown. In the most recent quarter, Facebook brought in over $1.24 billion in mobile-only revenues, a big chunk coming from app-install related ads.
Sungy, which is estimated to bring in about $80 million in revenues during 2014 (versus $53.7 million in 2013), will settle for a fraction of that.
This post was updated Wednesday morning with confirmation of the deal and additional details on the price, and separately later on Wednesday to clarify the total possible payout.