Sensor Tower Acquires Pathmatics - Market Intelligence Deal

Sensor Tower Acquires Pathmatics to Expand Digital Intelligence Capabilities

Sensor Tower, a leading mobile app market intelligence firm, has announced its inaugural acquisition. The company is integrating Pathmatics, a market intelligence provider, into its operations, merging Pathmatics’ paid digital and social media platform with Sensor Tower’s existing business.

Deal Details and Strategic Implications

While the financial terms of the acquisition remain undisclosed, it includes a growth investment from Riverwood Capital directed towards Pathmatics. This strategic move will enable the combined entity to deliver a more comprehensive suite of digital and mobile advertising insights to its clientele.

Specifically, customers can anticipate enhanced social insights encompassing platforms like TikTok, YouTube mobile, and Snap, all powered by Sensor Tower’s technology. The integration will also introduce digital TV (over-the-top) insights and broaden coverage for mobile apps and advertising data.

Growth and Investment

This acquisition builds upon Sensor Tower’s significant fundraising round last year, which secured $45 million from Riverwood Capital. Despite already being a profitable enterprise serving over 350 enterprise-level clients, the additional capital was sought to accelerate growth through investments in personnel, marketing initiatives, infrastructure improvements, and broader expansion efforts.

Pathmatics itself has experienced substantial growth, achieving over 100% year-over-year expansion since its inception in 2011. The company currently serves more than 250 brands, media agencies, and advertising firms, with over 7,000 platform users, representing a 200% increase in software-as-a-service growth since 2018.

The Rise of Digital Advertising

The timing of this partnership coincides with a surge in digital advertising expenditure, partly driven by the market shifts resulting from the recent pandemic. According to eMarketer, digital ad spending increased by 12.7% to $368 billion last year, and is projected to represent 58% of total media spending in 2021.

Leadership and Team Integration

Sensor Tower has acquired both the intellectual property and the entire 60+ member team from Pathmatics. The complete team will be integrated into Sensor Tower, with a combined leadership structure. Alexey Malafeev, co-founder of Sensor Tower, will continue as CEO, while Gabe Gottlieb, CEO and co-founder of Pathmatics, will assume the role of chief strategy officer.

Pathmatics’ Core Capabilities

Previously, Pathmatics equipped brands and agencies with comprehensive data on advertiser creative assets, spend, impressions, and publisher/viewer pathways. This enabled them to optimize budgets, refine marketing strategies, and anticipate competitor actions.

Future Integration and Product Roadmap

Customers of both companies will have the option to access each other’s solutions, encompassing mobile, social media, and digital insights. Long-term plans include the development of new products for their combined customer base of over 600 clients across 50 countries.

A key initiative is integrating Pathmatics’ ad intelligence data from platforms like Facebook, Instagram, and Twitter into Sensor Tower. Furthermore, efforts will be made to enhance Sensor Tower’s data with ad insights extending beyond app installations.

These enhancements will position the combined offering as a more valuable resource for larger brands seeking a holistic view of competitor campaigns, from app install advertising to broader brand awareness initiatives.

Deal Closure and Funding History

The acquisition was officially finalized on May 17, 2021. Pathmatics, headquartered in Santa Monica, had previously raised $7.7 million in funding from Upfront Ventures, BDMI, and Baroda Ventures.

Riverwood Capital’s Perspective

Ramesh Venugopal, principal at Riverwood Capital, stated, “As the global economy increasingly shifts to digital, it’s imperative that companies can understand and navigate the entire digital landscape — from mobile to web and desktop — using accurate and insightful data.” He further added, “The combination of Sensor Tower and Pathmatics presents a unique and valuable offering to customers allowing them to take advantage of a broad range of datasets with increased focus on consumer privacy and deep digital insights that leaders in every industry will need.”