European Ad Tech, A Buy; FPC Bringing Back The Ad Tech Breakfast Event; MIQ Still Blazing A Trail
FPC is in a nostalgic mood this week. OK Computer, arguably Radiohead’s second-best album (after The Bends, natch), is soundtracking this week’s non-AI-powered stream of ad tech consciousness.
The album sticks in the mind primarily because of a block of four tracks - Let Down, Karma Police, Fitter Happier, and Electioneering - which showcase the epoch-defining lyricism of York, the genius of Greenwood, and the sublime production of Goodrich.
Is this relevant to ad tech? Of course not. You could try to make a tenuous link to TTD’s stock crash this week, but no.
If there is some outlier connection, it’s this: you should only listen to this album sparingly, much like the TTD naysayers currently lining up to put the boot in and give you the predictable “I told you” guff. Yawwwwn.
Jeff Green and TTD will bounce back from this blip. It's not wise to bet against the GOAT, Jeff. As Tom Yorke opined, “Phew, for a minute there I lost myself”. Onwards.
European Ad Tech, A Buy
This week, Kevel announced that it was acquiring Nexta. Nexta is one of the best retail media stacks in the business, quietly building best-in-class retail media ad tech.
Armed only with just a world-beating stack - and zero marketing - the Nexta team built a great business in Europe, helping retailers, utility apps, and publishers to build commerce media solutions.
Nexta decided to run a process after a potential strategic acquirer tabled an offer. Working with ExchangeWire, a strong narrative was built around the company. Given that Nexta had built such incredible technology, it wasn't an overly complex process.
The problem, readers, is that European ad tech is so utterly shit at marketing itself. It’s a failing. In an industry with a ratio that’s 60% tech, 40% “bullshit” (i.e. storytelling and positioning), your sales patter needs to be world-class - especially when competing with Americans. Sometimes, you need a helping hand.
FPC can also take some credit as MadTechMoney was where the acquirer, Kevel, and the acquired, Nexta, first met. The CEOs of both companies (James Avery and Martin Jensen) appeared on a retail media panel at the event. It’s a beautiful ad tech match-making story.
Nexta raised very little money and exited for a respectable multiple with plenty of equity upside in potentially one of the greatest ad tech companies of this generation.
The point here is that the European market has so much value. We have to build great tech even just to stay alive.
The US has huge media budgets. You often need to raise big or go home to compete there (not always, though).
The downside of US ad tech: it can become costly. If you over-raise, you can become zombified, caught in an ad tech limbo. It is big enough to generate decent revenue and grow but is too expensive to buy.
There is a value arbitrage in acquiring companies in Europe. They are less expensive than US competitors, but invariably, they build better tech.
We recognised that when we set up FirstPartyCapital. The opportunity to invest in great people and ideas at sensible valuations is untapped. We will undoubtedly have a few exits that fit that value arbitrage mould. It’ll be great for our LPs and founders.
Congrats to James and Martin. European ad tech FTW.
Spotlight: Bringing Back The Ad Tech Power Breakfast Event
Back in the day (pre-Covid), there used to be an ad tech breakfast event nearly every week.
Joanna Burton, advisor and FPC LP, was the master of the breakfast event. And they were very impactful.
But as the world worked from home and the working week was reshaped, the ATBE (ad tech breakfast event) died out.
Recognising the need to feed the industry and bring great people together, FPC is audaciously reintroducing the breakfast event back into the ad tech calendar.
We are launching a new quarterly event called Spotlight. Spotlight will be, in all honest,y very self-serving, focusing on one of our key portfolio companies and the key problem they are attacking.
First up is Bedrock Platform, the natural heir to AppNexus, IPONWEB and Beeswax. Bedrock is redefining buy-side infrastructure in ad tech.
This Spotlight session will focus on curation, featuring a 30-minute panel with three senior industry figures and informal networking. There will be bacon butties and vegan options (mostly fruit) available to the hungry ad tech masses.
The event is running parallel with the Bedrock Platform syndicate raise, a chance for ad tech people to get a piece of the hottest ad tech company before it goes ballistic. And trust FPC, this thing is going to go big.
Given the limited capacity, this will be an invite-only event.
You can apply to attend the Spotlight event here: https://lu.ma/4mq9b7l2.
Stay tuned for details on the Bedrock Platform funding round, which is available to FPC’s syndicate members.
MIQ, The People’s GOAT
We had our good friend Paul Silver on the podcast this week. Paul is the Global President, Corporate Development at MIQ. Basically, he buys companies to help accelerate MIQ’s growth.
Paul is one of the smartest operators in the business. We go back to the very early days of programmatic, 2006. When he speaks about the MIQ strategy, you are reminded how special this company remains.
American readers need to appreciate the GOAT status. It has built a business servicing the needs of its agency clients.
Everything leads back to being on the media plan, but it's how they do it. They understand the needs of their clients, and they are the masters of managed service. They productise around this.
It’s not simply managed programmatic around a borrowed DSP. It’s a holistic approach that involves the whole agency operation, building custom tech, and solving core problems.
They also make money in markets that US ad tech cannot. The malleability of its solution is remarkable. The company knows what it is. It’s not actively trying to screw over its core partner cohort, the agency. That will become even more important after TTD’s earnings call.
Lee and Gurman don’t get the recognition they deserve, especially from the US trades. The company doesn’t seek it out; it quietly builds a world-class business.
That humble excellence is refreshing in an era of excessive chest-beating ad tech bro-ness. Maybe it’s because they come from decent stock. Perhaps it’s because they are just ordinary lads. Either way, MIQ will forever remain the people’s GOAT.
You can listen to FPC’s chat with Paul here: https://newsletter.firstpartycapital.com/p/episode-10-stackadapt-raises-235m.
That’s it for this week. Thanks for reading through. And remember, at the end of the day, after you fought your adversary for a slice of that programmatic/managed service pie, it just pays to be a decent person. On that reflective note, FPC will sign off.