RNTS Media buys mobile ad network Heyzap for $45M

Heyzap, a provider of mobile advertising for app developers, has been acquired by RNTS Media in a move intended to beef up its own offering in the space. Initially, the deal is for $20 million, but also includes “potential earn-out payments” that could increase that amount to $25 million, assuming that “certain ambitious targets” are met by 2017. What those targets are has not been disclosed. In total the deal is for $45 million.

Based in San Francisco, Calif., this Y Combinator alum specializes in not only helping developers make money off of their app but also getting them discovered, similar to the likes of AppLovin and others. Its magic is in the use of machine-learning algorithms which recommends mobile ads based on social platform data. In 2014, the company claimed that more than 5,000 games and apps use its service and that it had a revenue run rate of more than $13 million.

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The grab by RNTS Media is an effort to capitalize on mobile advertising mediation, a way by which developers can display ads from multiple networks in a transparent way. By doing so, ads can be optimized to show the most appropriate one to the right person. Heyzap launched this capability in October 2014 with cofounder Jude Gomila telling VentureBeat at the time: “We think the market is going in the direction of mediation. Developers want to know which ad networks are really working for them.”

According to a statement from RNTS Media, Heyzap is expected to reach $20 million in revenue in 2016 and has been a profitable company since the latter half of this year.

Heyzap’s acquisition will join its platform with mobile advertising service Fyber, which RNTS Media picked up in 2014. Since that move, more investments have been made to develop a strong platform in the space. RNTS Media chief executive Andreas Bodczek said in an interview this summer that his company seeks to be a full stack supply-side platform to not only help build products but monetize them as well.

Although there’s no word about whether there will be layoffs, it’s likely that Heyzap will follow suit with Fyber and will not be gobbled up by RNTS Media, instead becoming just an independent company.

Heyzap had raised $8 million in funding from investors like Union Square Ventures, Y Combinator, Qualcomm Ventures, Founder Collective, and angels such as Chris Sacca and Naval Ravikant.

Update: This post has been corrected to reflect the amount Heyzap was acquired for. Initially it was listed as $20 million, but the company told us in an email that it was for $45 million. This includes the potential earn out that it could receive.