Shares of the San Francisco company were climbing 22.7% to $20.86 in trading Wednesday.
Skillz said in a statement that the transaction was expected to close in the third quarter.
The acquisition will broaden Skillz’s footprint across the mobile gaming industry by combining its competitive platform with Aarki’s advertising capabilities, the company said.
Aarki is a growing demand-side platform (DSP) that engages in more than 5 trillion monthly advertising auctions, Skillz said.
Aarki is headquartered in Sunnyvale, Calif., and its roughly 160 employees will join the Skillz workforce. Aarki CEO Levon Budagyan will continue to lead the business as a division of Skillz.
Skillz, which was founded in 2012, has about 277 employees. The parent of titles like "Solitaire Cube" and "Jewel Blitz" went public in December by merging with Flying Eagle Acquisition at an equity valuation of $3.5 billion.
"Aarki’s proven machine learning will pair with Skillz’s robust first-party data to create an unrivaled value proposition for game developers," Skillz CEO Andrew Paradise said in a statement. "The integrated ecosystem will unlock new points of connectivity between consumers, developers, and brands, pairing the right impression with the right user at the right time, all while delivering a superior user experience."
Last month, Skillz posted first-quarter revenue of $83.7 million, up 92% from a year ago. Average revenue per user was at $10.35 compared with $5.57 in the prior year.
In April, Jefferies analyst Andrew Uerkwitz initiated coverage of Skillz with a hold rating and a $17 price target, while Cathie Wood's ARK Investment Management bought shares of the e-sports platform.
In March, Skillz priced a public offering of 32 million shares at $24.