KKR-backed AppLovin valued at over $25 billion as shares fall in market debut

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(Reuters) – Shares of AppLovin Corp fell 12.5% in their U.S. stock market debut on Thursday, fetching a valuation of more than $25 billion for the KKR & Co Inc-backed mobile app and gaming company.

The Palo Alto, California-based company’s shares opened at $70, below its initial public offering (IPO) price of $80 per share. It had earlier set a target price range of $75 and $85 per share.

AppLovin raised $2 billion earlier on Thursday by offering 25 million shares, out of which 2.5 million shares were sold by KKR Denali Holdings LP.

The company’s lackluster debut comes as a surprise in the midst of several other red-hot debuts such as Coinbase Global Inc, which floated its shares on Nasdaq on Wednesday and briefly became a $100-billion company.

Hundreds of other private companies are seeking to capitalize on the record boom in U.S. capital markets, having raised well over a $130 billion through IPOs and SPAC listings so far this year, according to data from Dealogic.

AppLovin is the latest player in the mobile gaming industry looking to cash in on the surge in demand for video games from people staying at home due to the COVID-19 pandemic.

AppLovin’s portfolio includes more than 200 free-to-play mobile games, such as “Word Connect”, “Slap Kings” and “Bingo Story”, which have drawn in more than 410 million daily active users.

Since the beginning of 2018, AppLovin has invested over $1 billion across 15 acquisitions and partnerships with app studios, games, and technologies, according to a filing.

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Morgan Stanley (NYSE:), JPMorgan (NYSE:), KKR, BofA Securities and Citigroup (NYSE:) were the lead underwriters of the company’s IPO.

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