AppLovin, once started as a mobile game developer and now a dominant player in the adtech sector, increased its advertising revenue by 75 percent last year. The stock price rose by almost 30 percent on Wednesday following the announcement of the quarterly figures, while the listing has virtually exploded from under 10 US dollars at the beginning of the year to over 450 US dollars. With a market capitalization of 150 billion US dollars and a forecasted revenue of around 7 billion US dollars for 2027, some stock market observers already consider AppLovin as a candidate for a "Magnificent Eight.

Behind this boom is, among other things, the investment company KKR, which invested $400 million in AppLovin in 2018 and thus held a temporary stake of a good third. However, although KKR exited with a billion-dollar profit at the IPO in 2021, the private equity giant missed out on an even greater return. Had the stake been held to this day, it would now be worth over $50 billion by rough estimate. KKR justified the partial sale on its duty to investors to realize profits promptly. AppLovin, in turn, benefited from the ability to buy back shares cheaply before the prices skyrocketed.

The steep rise has called traditional valuation standards into question, according to observers. With an operating margin of over 60 percent, AppLovin has shown how profitable the adtech business can be. Growth investments are trending, but they continually remind us that timing and a bit of luck are crucial for private equity.