Exit 2014: IPOs Sagged, But Mergers Surged For Video And Data Tech

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mergeThe ad tech attention isn’t going anywhere, yet 2014 exhibited some of a financial shakiness that stubborn open ad tech bonds by many of 2013, generally for companies that went open in a final 12 to 15 months.

The usually slight warn for me and many others [in 2014] was a remarkable switch in perspective per ad tech,” pronounced Tom Chavez, CEO of eccentric data-management height (DMP) Krux. “It seems that ad tech started out utterly clever and a marketplace got spooked and altered a mind and that was reflected in valuation.”

If 2013 was a tough year for open ad tech companies (see: Millennial Media, Marin Software, Tremor Video, YuMe, Conversant/ValueClick), 2014 was somewhat better.

Elgin Thompson, handling executive during Digital Capital Investors, described it as “good yet not good year, depending on a underlying association and a business indication and a sector.”

Many companies went open earnest technology, yet as investors got a closer look, they satisfied that many of these supposed ad tech firms were built around a network model, and had to rest on a pricy sales group to safeguard unchanging expansion – in other words, they had to buy their revenue.

“Anything that looks like a network, walks like a network, quacks like a network, people are holding a flattering curse view,” Chavez said.

Wall Street didn’t unexpected start shopping into a online ad attention in new years for a consequence of it.

One source, an executive during a private ad tech association who spoke on background, pronounced that large investors, meddlesome in shopping growth, favourite certain characteristics of ad tech – a zone seemed steady, pretty fast-growing and had a calculable series of companies during IPO scale.

Following investment, however, many ad tech companies suggested themselves as ad networks in disguise, that dampened a initial excitement. It also forced investors to spin some-more worldly about a space.

As such, they became shrewd to a fact that certain buzzwords like “recurring revenue,” “software-as-a-service” and “long-term contracts” were all used to deception what were in actuality network models with a few technological add-ons.

Investors are now shrewd adequate to ask either an ad tech association indeed is a tech company. It’s one of a reasons  some vendors like French retargeter Criteo, that insiders contend has a clever sales and selling model, has had continued success relations to a peers.

On a other hand, companies once suspicion to be diamonds in a rough, like ad network Rocket Fuel, have given mislaid their luster. Rocket Fuel’s initial cost per share was $29 when it debuted Sep 2013 and skyrocketed into a $60 range. But in early February, following a delegate sale in that executives cashed out to about $150 million, Rocket Fuel’s batch dipped and, given August, it’s hovered around $15.

“From my perch, there seems to be a lean behind to good, out-of-date technology,” Chavez said. Notably, Rocket Fuel bought [x+1] in August, potentially giving it a tech height play. (See list of 2014 MA activity below.)

Thompson concluded with Chavez.

“What’s removing value? Scale, loyal record and speed to market,” he said. Scale and element income growth, Thompson said, prove business trust in a vendor’s product and are peaceful to compensate for it. It’s validating and indicates staying power.

“We’re anticipating a tube is really full and we’re carrying to puncture in on a record side to gamble that companies have loyal information science, not usually an ad network flitting itself as something else,” he said.

Because a Fed will expected lift seductiveness rates by a spring, Thompson anticipates IPO activity will pick adult in a initial half of 2015.

“You’ll see a inundate of IPOs in Q1 and Q2, usually to get out a door,” he said. Thompson said investors are improved versed to distill a hype that mostly accompanies ad tech firms.

Still, one source cautioned not to perspective IPOs as an finish to a race, yet simply as a financing event. More mostly than not, an IPO happens given investors wish to get paid. Companies compelled to go open during reduction than a $1 billion gratefulness mostly find themselves preoccupied by movement traders who aren’t creation long-term bets about a sector, that creates extensive fluctuations in a batch price.

Factor in 90-day stating cycles, shareholder scrutiny, correspondence costs of about $2 million per year and a need to emanate consistent expansion during a responsibility of long-term investments, and an IPO – both in a run-up and issue – is an almighty migraine.

Going Public In 2014

Though Thompson characterized 2014 as “a good year,” companies that went open in 2014 – like Rubicon Project, Matomy and TubeMogul – had churned success. Supply-side height (SSP) PubMatic seemed to gear adult for an IPO in February, yet nothing came of that initial sound and fury.

Israeli opening network Matomy pulled out of a IPO from a London Stock Exchange in April, citing a technicality, and resurrected a open aspirations in Jul when it sought to lift $70.1 million during a $347 million valuation. Initially, it had sought to lift $100 million during a $400 million valuation. In October, Matomy insiders sold a 20% stake of a association to Publicis Groupe.

Unlike Matomy, Rubicon’s IPO wasn’t accursed from a start. In March, it sought to lift $108 million during a $671 million valuation, and it stormed out a embankment in April, debuting during $15 per share and sharpened adult to $20. Initial financier fad stemmed from what Rubicon – largely noticed as a supply-side platformcould eventually be: a major tech actor in video, mobile and on a approach side.

Certainly, a association has taken stairs to enhance a core competencies – a new acquisitions of iSocket and Shiny Ads (see below) give it technologies to automate a approach sales process. Previously, it expelled 49bc, a product that focuses on direct-sold mobile inventory.

But video is another story, and Rubicon, in a many new quarterly gain call, scaled back a once-lofty video aspirations. At a time, a marketplace cap, that Rubicon hoped during a Apr IPO would be $671 million, was $367 million. Nevertheless, Rubicon’s quarterly revenues have been clever and a marketplace tip as of this essay was $586 million. Its batch has trended ceiling given mid-October and is now in a $16 range.

Video DSP TubeMogul has finished well, notwithstanding an inauspicious beginning in Jul when it labelled a shares during a cut-rate $7. One AdExchanger source wondered during a time if financier vigour encouraged TubeMogul‘s IPO.

But given then, TubeMogul has a marketplace tip of $685 million and a batch is in a $20 range. Its self-serve business was the source of substantial gains during a many new quarterly, and a association is looking to enhance a mobile and general footprint.

The challenge, going into 2015, is that many ad tech vendors play a diversion of me-too.

“They demeanour during who’s finished good before them and they try to indication that selling pronounce to advisers, a open marketers and a press,” Thompson said.

MA Trends: Power To Data And Video

For many companies, a elite approach to income out is to get acquired. And there are countless ad tech and selling tech players out there looking to build one-stop shops, and hunt for facilities to spin out their smoke-stack functionalities.

In ad tech, cruise Google, Facebook, AOL, Yahoo and Twitter. In selling tech, cruise Adobe, Salesforce and Oracle.

Oracle done a extensive dash on Monday, divulgence a vigilant to acquire Datalogix, adding it to a information sell it hereditary Feb by a BlueKai acquisition. Nielsen and Adobe were also rumored Datalogix suitors.

Other large information plays embody Acxiom’s squeeze of onboarder LiveRamp and Alliance Data Systems shopping Conversant on interest of a information selling unit, Epsilon.

Certain facilities seemed quite in approach in 2014, including DMPs (Oracle-BlueKai, Rocket Fuel-[x+1], Publicis-RUN and IgnitionOne-Knotice), detrimental engines (Google-Adometry, AOL-Convertro) and video platforms (ComScore-FreeWheel, Facebook-LiveRail, Yahoo-BrightRoll, Telstra-Ooyala and RTL Group-SpotXchange).

There’s a snowball outcome that helps confirm that categories « pop » in any given year. A source remarkable that as a businessman in a specific bucket looks to sell – or as incomparable smoke-stack actor demeanour to acquire – it creates chatter. If one association buys a indicate solution, a competitors competence start to prioritize identical indicate solutions to stay competitive.

A lot of MA activity happened in 2014 and Thompson anticipates some-more in 2015, as new entrants – like Accenture, IBM, Dell and HP – will start to build out selling tech stacks.

“There’s a lot of income on change sheets in tech,” Thompson said. “There’s $500 billion opposite a tip 250 open tech companies. They like any other association are acid for growth, and that will fuel MA activity in startups.”

The following is a list of MA activity that occurred in 2014. This list isn’t by any means downright and it’s focused on ad tech companies, so we’re withdrawal out some vital acquisitions, like Publicis shopping Sapient for a cold $3.7 billion.

Additionally, a dates simulate a times during that a vigilant to acquire was announced, and not a tangible shutting date.

February

Oracle buys BlueKai for an estimated $350-$400 million. It inherits a DMP for a selling cloud and used BlueKai’s information sell as a linchpin for Oracle Data Cloud, that a association denounced in July.

Google buys anti-fraud tech provider Spider.io and a founder, Douglas de Jager.

March

Comcast buys FreeWheel, yet it declares a video ad-serving height will continue a independence. TechCrunch estimates a price during $320 million.

Resistance is futile for tab government provider Tagman, that is ultimately digested by a aspirant Ensighten.

IgnitionOne buys Knotice, a DMP and email use provider.

May

Google snaps adult detrimental businessman Adometry, a same day AOL buys detrimental businessman Convertro for $101 million.

Acxiom buys information onboarder LiveRamp for $310 million.

AOL’s Adap.tv buys PrecisionDemand, that mines set-top box data.

SSP PubMatic buys mobile ad server Mocean Mobile.

June

AppNexus buys Parisian viewability organisation Alenty, a initial of 3 acquisitions for a year.

Marin Software buys assembly retargeting height Perfect Audience for about $23 million.

Singaporean telco SingTel acquires ad network Kontera and cross-channel height Adconion on interest of a mobile ad solutions subsidiary, Amobee.

Twitter tries to make TV some-more amicable when it buys SnappyTV, a video writing and placement platform.

Google buys a tiny digital video ad tech provider mDialog.

July

Twitter buys TapCommerce for an estimated $100 million.

Facebook acquires video SSP LiveRail for an undisclosed sum, yet TechCrunch estimates a price between $400 million to $500 million.

Yahoo gets video placement height Rayv and, some-more significantly, mobile analytics platform/marketplace Flurry.

LinkedIn buys B2B arrangement ad height Bizo for $174 million.

RTL Group acquires a 65%, $144 million interest in video SSP SpotXchange.

August

Ad network Rocket Fuel rises off with a merger of DMP/DSP [x+1] for about $230 million.

ComScore bolsters a cross-platform rascal fighting with the squeeze of cybersecurity startup MdotLabs.

Australian telco Telstra acquires a infancy interest in Ooyala, a video analytics platform. Telstra previously owned a 23% interest for $61 million. It ups a ante with an additional $270 million investment, for a 98% stake.

IgnitionOne builds out a mobile capabilities in purchasing mobile DMP/DSP Human Demand.

Here comes a new challenger! Just when it seems that Google would buy a video diversion streaming height Twitch, Amazon swoops in and buys it for $1 billion.

September

Here’s a doozy: Alliance Data Systems buys Conversant – before a ad network ValueClick – for a cold $2.3 billion. Most of a Conversant resources will be used by Alliance Data’s Epsilon subsidiary.

AppNexus buys Open AdStream from WPP Group’s Xaxis. As partial of a deal, a group holding association receives a $25 million interest in AppNexus, value about 15% of a company.

Much-maligned Millennial Media buys mobile SSP and sell Nexage for $108 million.

October

This one isn’t a finish acquisition, yet WPP Group buys 16.7% of media dimensions association Rentrak for $98 million. Rentrak in spin gets Kantar Media’s TV dimensions business in a US. It was WPP’s second tech-for-equity barter in dual months.

Ensighten slaps a merger tab on Anametrix, a multichannel analytics shop.

Telstra’s Ooyala acquires video SSP Videoplaza.

Matomy buys mobile programmatic ad height MobFox for $17.6 million.

Publicis Groupe buys RUN DMP for an undisclosed sum, on interest of a media group Starcom MediaVest Group.

November

MediaMath acqui-hires ad tech startup Rare Crowds. Rare Crowds owner Eric Picard joins MediaMath as a VP of vital partnerships, focusing on a build-out of private marketplace products.

After a month of rumors, Yahoo acknowledges it’s putting a Alibaba income to use and shopping video ad network-turned-platform BrightRoll for $640 million.

Rubicon Project hits a double when it buys iSocket and Shiny Ads, dual ad tech companies that concentration on automating approach understanding processes. The sum cost of a deals is $30 million, yet sources consider a bulk of that comes from iSocket.

December

AppNexus buys cross-device ad tech startup MediaGlu, bringing a yearly MA activity to about $200 million.

Oracle buys Datalogix, that links online activity to offline shopper actions. Datalogix, a vital Facebook partner, will overlay into Oracle Data Cloud. Nielsen and Adobe were also rumored to be in a using for Datalogix.

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