Kobiton, a mobile application testing platform headquartered in Atlanta, which provides developers and quality assurance teams with the ability to test applications on genuine devices – both locally and via its cloud service – has announced the acquisition of Mobile Labs, another mobile testing service also located in Atlanta.

To fund this purchase of a well-established competitor, Kobiton secured a $14 million extension to its existing $5.2 million Series A funding round. This additional capital came from current investor BIP Capital, alongside new investor Fulcrum Equity Partners.

According to Kobiton CEO Kevin Lee, the acquisition cost should not be inferred from the funding amount, although it is likely a reasonable approximation. The specific financial details of the transaction were not publicly disclosed. Mobile Labs, established in 2011, had previously raised approximately $15 million in funding, as reported by Crunchbase, with its last funding round occurring in 2014. Importantly, Kobiton and Mobile Labs did not share any common investors.

The acquisition is notable given that Kobiton, founded in 2017, may initially appear to be the smaller of the two companies. Lee suggests that Mobile Labs’ decision to be acquired stems from a difference in strategic focus. While Kobiton has consistently prioritized the use of machine learning to assist developers in creating app tests – and leverages the open-source Appium testing framework – Mobile Labs had not kept pace in this area.

“Their investment in [Artificial Intelligence] was somewhat delayed, and I believe they recognized – as the broader market will likely realize – that a significant, early investment is crucial to avoid falling behind,” Lee explained.

Lee also highlighted the considerable overlap and potential benefits between the two organizations. Mobile Labs serves a substantial number of clients within the gaming and financial services sectors. Many of these clients are relatively new to mobile development, contrasting with Kobiton’s customer base, which frequently consists of companies that are mobile-first.

“They have operated for a decade and [have] an extensive network of partners, including a significant presence outside of the U.S.,” Lee stated. “Their primary focus has been on serving large, well-established enterprises in highly regulated industries or those with strong concerns regarding intellectual property protection – operating securely behind firewalls – where they have achieved considerable success.”

Lee indicated that these Mobile Labs customers were also seeking testing solutions powered by AI/ML, and the acquisition will enable the integration of Kobiton’s technology with the existing Mobile Labs offerings. Customers will have a clear path to upgrade and can proceed at their own speed. Currently, there are no plans to discontinue Mobile Labs’ current services, although some of the company’s individual brands may undergo renaming.

As a result of this acquisition, Kobiton will more than double its U.S.-based workforce, although it’s important to note that a significant portion of the company’s team is located in Vietnam.