Machine Zone Inc. reportedly got a big haircut on its valuation in this week's sale to AppLovin Corp.
Bloomberg cited unnamed sources on Friday who said the "Game of War" creator was valued at about $500 million in the deal, a far cry from the $5 billion it was estimated to be worth at its peak in 2016.
The price is also much less than the $725 million Machine Zone raised over the years from investors who include Y Combinator Management, Anthos Capital, Menlo Ventures and JPMorgan Chase & Co. The company is a Y Combinator alumnus, emerging as part of its Winter 2008 batch.
The two Palo Alto-based companies didn't disclose the financial details of their deal, which Bloomberg's sources said gave Machine Zone stakeholders cash and stock in the combined company.
A lot has happened at Machine Zone since its last funding round and peak valuation four years ago, some of which likely played a role in its steep decline in valuation.
About a year after raising those funds, co-founder and then-CEO Gabe Leydon launched Satori, an open version of the live-data streaming technology that helped make Machine Zone into a mobile gaming powerhouse. The idea was that Satori could be used for multiple Internet of Things use cases, including smart cities.
At one point Leydon spent big on marketing, buying expensive spots during the Super Bowl and Thursday night NFL games that featured Kate Upton, Mariah Carey and Arnold Schwarzenegger.
He also began moving the company into blockchain technology and cryptocurrency, which was apparently the final straw for investors who pushed him out and promoted Chief Operating Officer Kristen Dumont as his successor.
“I would say the culture was extremely hard-charged, and people started to feel confused, and maybe a little bit resentful about where they were spending their time because they no longer understood what they were marching towards,” Dumont told Fast Company in a November 2018 article headlined, "How the maker of the mobile hit 'Game of War' unpivoted itself."
A ranking posted of the 100 most valuable Y Combinator alumni that the accelerator posted last fall was perhaps an early signal that Machine Zone's value had plummeted. It went from No. 7 in the 2018 ranking to not even appearing in the update posted last October.
Bloomberg cited unnamed sources on Friday who said the "Game of War" creator was valued at about $500 million in the deal, a far cry from the $5 billion it was estimated to be worth at its peak in 2016.
The price is also much less than the $725 million Machine Zone raised over the years from investors who include Y Combinator Management, Anthos Capital, Menlo Ventures and JPMorgan Chase & Co. The company is a Y Combinator alumnus, emerging as part of its Winter 2008 batch.
The two Palo Alto-based companies didn't disclose the financial details of their deal, which Bloomberg's sources said gave Machine Zone stakeholders cash and stock in the combined company.
A lot has happened at Machine Zone since its last funding round and peak valuation four years ago, some of which likely played a role in its steep decline in valuation.
About a year after raising those funds, co-founder and then-CEO Gabe Leydon launched Satori, an open version of the live-data streaming technology that helped make Machine Zone into a mobile gaming powerhouse. The idea was that Satori could be used for multiple Internet of Things use cases, including smart cities.
At one point Leydon spent big on marketing, buying expensive spots during the Super Bowl and Thursday night NFL games that featured Kate Upton, Mariah Carey and Arnold Schwarzenegger.
He also began moving the company into blockchain technology and cryptocurrency, which was apparently the final straw for investors who pushed him out and promoted Chief Operating Officer Kristen Dumont as his successor.
“I would say the culture was extremely hard-charged, and people started to feel confused, and maybe a little bit resentful about where they were spending their time because they no longer understood what they were marching towards,” Dumont told Fast Company in a November 2018 article headlined, "How the maker of the mobile hit 'Game of War' unpivoted itself."
A ranking posted of the 100 most valuable Y Combinator alumni that the accelerator posted last fall was perhaps an early signal that Machine Zone's value had plummeted. It went from No. 7 in the 2018 ranking to not even appearing in the update posted last October.