Xyo sells its app-finding tech to Mandalay Digital Group for integration with Digital Turbine

The Berlin startup Xyo, which has deals with partners such as T-Mobile, has sold its app search engine and contextual advertising tech to the U.S.-based [company]Mandalay Digital Group[/company], the proprietor of one of Xyo’s biggest rivals, Digital Turbine.

Two of Xyo’s co-founders, Zoe Adamovicz and Marcin Rudolf, will join Digital Turbine, with Adamovicz heading up Digital Turbine’s EMEA business and Rudolf the firm’s R&D operations. The other co-founder, Matthäus Krzykowski, will take a breather for a few months. Five engineers also come as part of the package.

There’s no stated figure for the deal but, based on a mix of the employee transfer with that of intellectual property rights, and other performance-related elements, I’d put the total amount near $20 million. (Mandalay’s SEC filing on Thursday mentions a figure of $2.5 million, but that’s only for the IP and partner contracts — I understand the other elements of the transaction are weightier in financial terms.)

Xyo the company still exists, holding a significant interest in “app economy quantification” spin-off Priori Data.

Digital Turbine is much better funded than Xyo, but Xyo arguably had the better technology. According to a statement, Digital Turbine will “immediately integrate” that tech, which uses over 1,000 fine-grained categories of applications to solve one of the biggest problems in modern app stores – the fact that very few apps, relatively speaking, surface to the top of the broad categories people see.

This is particularly useful when we’re talking about small screens that are less conducive to typing in detailed queries. According to the statement, Xyo’s tech will be part of Digital Turbine’s imminent rollout with [company]Verizon[/company] and [company]Vodafone[/company] Australia.

“As part of Digital Turbine, Xyo’s revolutionary app discovery technology will reach consumers at scale much more quickly,” Adamovicz said in the statement. “But apps are just a start. Consumers have entered a new age where digital content is personally recommended on their phones. We are very excited to be part of Digital Turbine as we work together to develop new technologies that can help shape this consumer world.

I understand that Xyo’s app search website and Android app will stay operational for now, which would make sense as they provide a showcase for prospective partners.

This article was updated at 7.15am PT to add details about Mandalay’s SEC filing, which wasn’t public at the original time of writing.