Investment is (slowly) trickling back into ad tech

After a comparatively quiet two years, investors appear to have regained their appetite for ad tech in terms of early-stage investments, as sources also predict grander-scale mergers and acquisitions in late 2024.

It would be premature to say a fresh wave is on the horizon. Still, recent activity is a stark contrast to the conservatism of investors in 2023, with speculation centering upon the AI and CTV sectors.

For example, France-based Vibe.co today announced $22.5 million in funding, with the startup likening itself to “the Google Ads of streaming” as it pitches itself as the go-to CTV platform for marketers in the SME sector.

The Series A round was led by Singular, and also comes with a reinvestment from Elaia Partners and the
participation of Sequoia’s Scout Fund, Motier and seasoned ad tech investors such as Benjamin
Antier, Cyril Vermeulen, Laurent Asscher, Very Group and Alain Roubach.

Raffi Kamber, general partner and co-founder of Singular, noted how Vibe posed an alternative to more “entrenched players” such as YouTube.

Meanwhile, Arthur Querou, CEO of Vibe, explained how his company was geared toward helping SME marketers deal with the growing fragmentation in the space. “You have broadcasters [and streamers] like Hulu and Roku launching their own platforms,” he said, “we want to be the one platform that helps them run their entire CTV ad strategy.”

Earlier in the week, TVScientific announced a $9.4 million round, in the guise of a convertible note, with investors S4S Ventures, BDMI and Progress Ventures participating. Meanwhile, ad tech veteran Michael Rubenstein last week unveiled a $6.5 million funding round, led by Radical Ventures, for his latest AI venture Firsthand.

Separately, First Party Capital has also made a seed investment in Bedrock, a startup led by former Google and IPONWEB executive Shane Shevlin.

Rich Ashton, managing partner at First Party Capital, told Digiday the investment was geared toward seizing the opportunities posed by the loss of traditional ad tech tools such as third-party cookies. “The entire space is about to be upended,” he said, “we [Bedrock] want to be an infrastructure company that can help ad networks, retail media publishers and anyone with their own first-party data to build their own specialized bidder, or buy-side solution.”

Pauline Roux of Elaia, one of the venture capital investors behind Vibe, told Digiday interest in ad tech had waned in recent years, compared with the high-growth era of the early 2010s, as the space became increasingly crowded with few standout players. “There’s not a lot of ad tech companies out there that have the opportunity to be worth billions,” Roux said. “I think CTV is one of the few areas [of ad tech] where you can make a difference.”

Meanwhile, separate sources told Digiday to expect a more consistent M&A deal flow in the second half of 2024, with Will Ritchie of investment advisory firm WY Partners predicting that private equity firms will be proactive in the space later in the year.

“We expect more of the larger PE-backed marketing groups in the U.K. to follow in the footsteps of Brainlabs and MSQ Partners and look to exit to new investors during 2024,” he said. “At the same time, those groups with new investment will look to deploy their capital, potentially driving more M&A activity through bolt-on acquisitions.”

Stephen Master, a partner at GTCR, the PE firm behind Simpli.fi, told Digiday, “I’ve started to see a number of founder-led companies that got left behind in the market craze of 2021 back in market looking for capital … it took them a few years to wait out the choppiness of the last two years, but it’s a pretty good market right now.”

https://digiday.com/?p=536372

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