Importance Of M&A Strategic Friends; Sell-Side YouTube Ad Tech Magnificence; More Ad Nets Please
Importance Of M&A Strategic Friends; Sell-Side YouTube Ad Tech Magnificence; More Ad Nets Please
Importance Of M&A Strategic Friends
FPC split its time this week between Possible and the Azerion client off-site.
Possible looks like a smash hit conference for the American market. The networking has been immense, and Possible is raiding the CES marketing budgets.
There is no contest between a sad, forced post-Christmas get-together in the Mojave Desert versus an April ad tech jamboree on Miami Beach.
You wouldn’t expect anything less from Christian Muche, who single-handedly turned a backwater German event into a global one. RIP, DMEXCO.
The other part of the FPC collective was invited to the two-day Azerion off-site in Venice. It was an excellent ensemble of European buyers, publishers, and investors.
Azerion is a public, ad tech-first company. Its scaled managed service business underpins its buy-side and sell-side programmatic tech.
It is doing $550 million in revenue and $75 million in EBITDA. Azerion is a stupidly undervalued company, but that’s for another post.
What’s important to FPC is that it’s a veracious acquirer of companies. And that should make our LPs happy. But the good news, reader, is that Europe has a few big acquirers.
As well as Azerion, we have MIQ that is very active in M&A. Our ad tech showbiz friend, Paul Silver, is running corp dev and has been quietly doing some chunky deals (worthy of ad tech trade press coverage). The company is always hunting for great companies to help accelerate growth.
Equativ, which did a big PE deal earlier in the year, is looking for ad tech businesses. The French ad tech company is looking to scale. Organic growth helps, but buying companies move things along quickly.
A PE narrative also backs Seedtag and is already buying companies to bolster its wildly successful contextual business.
Publicly listed MGI, which owns the Verve Group, is also continually looking to grow its $3 billion market cap.
What we have now in Europe is a group of scaled buyers. Sure, it doesn’t compare to the many strategic buyers in the US - but the gap is starting to close.
Having these strategic buyers in our backyard makes it easier for us to understand their technology blind spots.
FPC is looking forward to future off-site get-togethers.
Contxt Media Syndicate Deal Live On Platform
Just alerting readers again to the latest deal - ContxtMedia - live on our syndicate platform.
It’s a piece of YouTube sell-side ad tech joy, enriching publishers and MCNs selling YouTube directly to agencies and advertisers.
The deal is SEIS-covered. A deep dive into financials, tech, and TAM is available here - https://investors.firstpartycapital.com/deal/detail/74719138-8755-4ff1-bb8a-31fa82b979a6. There is also a 30-minute Q&A with Ed French, CEO of Contxt Media.
FPC has already invested and will invest more by the end of the year.
Here are the seven reasons why FPC loves this deal:
Contxt Media is the contextual layer for VOD, working with publishers and creators to increase video & CTV yield.
Contxt Media’s real sweet spot is on the YouTube sell-side, where it helps publishers, MCNs, and creators transcribe video content, build categorisation for YT (a function Google cannot deliver), and automate integration into GAM for PG sellers.
YouTube will attract $33 billion in spending this year, bigger than the entire European TV ad market combined (£28 billion). Still, YouTube is woefully underrepresented by ad tech - and practically non-existent on the sell side.
Thousands of media companies and creators sell YT PG deals to agencies, making up about 10%+ of YT spend. Contxt Media delivers a greater yield for this segment of customers—and, more importantly, more money.
FPC can integrate Contxt Media into its global network. We already have 5-6 resellers lined up. Unlike most managed service businesses, it's also a lean tech machine. There is no need for IO slingers. Empower your customers - not obfuscate margin.
For UK investors, this £250K is completely SEIS covered, giving you a 50% tax rebate on the investment.
Contxt Media is one of FPC’s best portfolio companies, and we love it. It targets an underserved market, can be scaled easily through the FPC network, and has proper tech. We expect it to be taken out early.
Get investing.
Ad Nets Are The Bedrock Of Our Industry
Since the launch of Bedrock Platform, we have had some fascinating conversations with companies globally looking to build innovative businesses.
Ad networks are, of course, the most cutting-edge. Curation is changing their fortunes.
With cookie deprecation, open market buying is getting more difficult. Agencies are leaning into curation and “curation houses” to make campaigns work.
Anyone with direct demand is a potential winner in curation.
As a fund, we are interested in hearing from any early-stage curation specialist or ad network looking to build something bespoke.
We can help on the tech (cc entire portfolio) and investment sides. And the exits are there: the market is full of ad network-friendly buyers (see above).
We will develop a fully formed plan for how FPC can help accelerate the next breed of world-class ad networks. Stay tuned for that.
Until next time, readers.