User Acquisition ("UA") is a category that our team has been looking at for a while. Having seen the inner workings of multiple mobile game developers as investors, we realised a few years ago that the largest expense of the largest developers is on UA. In some cases, developers spend as much as 50% of their revenues on UA to grow their user base. So when you look across the mobile game sector with tens of billions of dollars of revenue then it's not hard to figure out that UA is a multi-billion dollar opportunity.
We were introduced to Jon Zweig, co-founder, and CEO of AppOnboard, by one of the founders of a company in our portfolio earlier this year where Jon is a co-investor with us. Jon founded the company that became AdColony, the successful mobile video ad network, that was acquired by Opera Software in 2014 for $350 million. Given his background and the referral, we decided to have a call with Jon right away and we were impressed. Jon was a successful, driven and serial entrepreneur looking to do another startup in UA again but the plan this time was to build a much bigger company.
The playable ads category is one that LVP has seen in the past over many years but for various reasons have passed on as we did not believe the tech was right to build a large business around. This time is different. The AppOnboard team have developed technology that transforms any mobile app into a full fidelity demo for end users to experience an app before choosing to download from the App Store. Jon already had most of the round committed but was keen to explore how the LVP team could be of value.
We started due diligence right away. Meanwhile, the AppOnboard team was getting amazing feedback from many potential customers and soon started to sign up multiple large mobile game companies as customers.
We met Jon and some of the team at GDC in person and there was mutual appreciation of both parties. Amazing things do happen when you meet in person. We told Jon we wanted in as the combination of AppOnboard’s technology, strategy, team and timing made this an ideal company to invest in right now. Jon promised he would find room in the round for us.
After a few more discussions with the team, we were delighted that AppOnboard chose LVP to co-lead the round alongside Troy Capital Partners, with a syndicate of VCs and CxO luminaries of the mobile app ecosystem. Many thanks to Andrew Allison at Gawkbox for the introduction to Jon. AppOnboard is hiring for a number of jobs so contact them here. The HQ is based in Los Angeles with plans to build the team there plus San Francisco and London.
See below for the AppOnboard launch video: