FPC could write a generic newsletter on the latest industry trends and give our hot take. Why bother? We are already well catered for. ExchangeWire for the global and the necessary technical deep dive. Tipsheet for the aggregated summary. Seb, Ronan and Lara for the hard reporting.
Creating Ad Tech Alpha
This “regular” newsletter outlines how we (FPC) are trying to dominate our rarefied ecosystem and make our LPs money. Our recent edition on FPC’s evolution into a Full-Stack Venture offering is just a glimpse of how we are trying to create the edge needed for success.
We’ve been building a farm-to-table strategy for some time. The ad tech capital allocation game is a tough one. Exits can be hard to come by, especially if you’re writing small cheques into undifferentiated and often overpriced startups.
We believe FPC needs to be involved at every juncture - from incubation to scale to sale. We are now on incubation number 8.
Building Utility Is The Only Strategy
Most of the 8 incubations are in stealth. All are building new solutions - in boring corners of the industry where problems are business-critical. We're focused on embedded workflows/infrastructure, proprietary signal, and AAT (Adjacent Ad Tech) opportunities.
Our own portco, LightBoxTV, is a perfect example of this - wonderfully boring - embedded workflow software. The company has been deeply integrating into its agency clients’ tech back end, becoming their media planning and activation hub for hundreds of millions in linear TV, CTV and OOH spend. The dull utility stuff is very sticky.
A lot of ad tech right now has no moat and will struggle to scale. Ask yourself this question: if you can conceive of an AI optimisation tool or a UMP (!) using Claude during your lunchtime break, don’t you think another 100 lads and ladies can do the same? Commoditisation is inevitable when the cost of software dev and product design goes to virtually zero.
Serving Up The Ad Tech Wagyu
The farm-to-table strategy is not the end of the process, though. You need to complete the loop. To labour the metaphor, you need to find the high-end steakhouses that will buy and serve up your prized ad tech Wagyu.
Identifying the strategics who will buy your startups is the critical final piece. And it’s definitely the hardest. You need to know who’s buying, why they want to buy, and when the board greenlights the shopping list.
Most buyers are still US-based, which makes little sense given how many European players sit out ad tech deals. Changing that is a fund objective: building relationships with the homegrown buyers (more on that in future issues).
If you came for inane UMP analysis, you’re leaving angry and bitterly disappointed (not sorry). If you came for FPC’s unique (real) perspective on the ad tech world, this was undoubtedly the best five minutes of your week. And on that self-congratulatory note, we’ll leave it there. Until next time, readers, keep it boring.
