MadTech Has An Ugly Sustainability Problem; Sorrell Says It's Time To Invest In The Industry
This is the FirstPartyCapital weekly newsletter. It covers news and updates about the FirstPartyCapital fund and its portfolio companies.
Ad Tech Has An Ugly Sustainability Problem; Cavai Is Here To Help
In a sobering piece last week, Steffen Svartberg, CEO at Cavai (a FirstPartyCapital portfolio company), outlined how the digital advertising industry was failing badly at environmental sustainability.
Svartberg highlights research by Cavai that found a “single ad impression produces between 0.08 and 1.09 grams of CO2”. If you multiply that by trillions of ad impressions, you start to get a handle on the industry’s atrocious carbon footprint.
That’s right, reader, every time you serve a bandwidth-heavy video ad you are probably killing a polar bear. And I am not being facetious here. Our brief tenure on this planet has seriously destabilised the world’s environment; the awful consequences of which will likely be endured by future generations.
As an industry that benefits financially off uncontrolled consumption, we have a responsibility to at least work and act in the most sustainable way possible.
We know the Cavai team are working on technology that is actively trying to cut down energy consumption. If you have any interest in ESG or environmental responsibility at the corporate-level, now is a good time to talk to the team.
Just another reason why we invested in this exciting and innovative startup.
Sorrell’s Move Into Venture Capital Is A Flashing Buying Signal: YES, It’s Time To Invest In FirstPartyCapital
There are very few people in this industry you can truly label a legend. Martin Sorrell is one of those people. He’s as close as you will get to GOAT status.
The man’s CV is, to put it mildly, intimidating. Having built a multi-billion pound holding group business from scratch through a combination of supreme industry knowledge and genius financial machinations, he decided in his seventies to launch a next-gen agency model. That company, S4Capital, is now worth over a three billion dollars.
This week he announced he is launching a venture firm to invest in ad tech, martech, analytics and - SPLUTTER - web3 projects. At FirstPartyCapital we see this a positive move for the industry. It means we have yet another dedicated big player to invest in our portfolio’s follow-on rounds. And I expect we will end up co-investing with Sir Martin and team.
Our investors will also do well from this development with a higher probability of a marked up fund. As for the rest of you not in the FirstPartyCapital fund, you are now effectively on the outside looking in.
Unlike FirstPartyCapital, which actively allows smaller LPs to invest in our fund, S4S is a proper institutional vehicle. Sorrell and established money will do very well from investing in an industry that will continue on an upper trajectory for the next decade.
But there is one sure way to benefit from all of this, dear reader: INVEST IN FIRSTPARTYCAPITAL. It’s that simple.
M&A Mania Is Good For The Prospects Of Our Portfolio Companies
It’s only the second week of January and the M&A deals are coming thick and fast. We really can’t put out this newsletter this week without acknowledging the $70 billion acquisition of Activision Blizzard by Microsoft (https://www.pcgamer.com/microsoft-will-acquire-activision-blizzard/). It’s an absolute stroke by Microsoft. It adds more gaming IP to its offering.
The Activision Blizzard stock has taken a hammering of late, straining under a dysfunctional company culture and a failing senior leadership team. Microsoft saw its opportunity to bag a quality asset on the cheap. Expect to see more content acquisitions as we accelerate to a world of gaming walled gardens (content+first party data+ad tech).
The other notable M&A deal this week was the LoopMe PE deal. Mayfair Private Equity took a majority stake valuing the company at more than $200 million.
Private equity certainly loves European ad networks. This is the third big PE ad net deal in as many years: both Captify and MIQ took on PE money, valuing each in the $150-$300 million range. And the latter is rumoured to be doing another monster PE deal that could easily value it between 500 million and a billion dollars. European MadTech seems to be working for PE.
The FirstPartyCapital portfolio is in the M&A sweet spot of SaaS MadTech. As PE-backed and publicly-listed ad tech companies need to evolve beyond their dying legacy businesses, they will come shopping aggressively for innovative technology. Our portfolio of tech startups can certainly help these companies. Exciting times, indeed.
Deals Live On The FirstPartyCapital Platform
Evorra: The perfect application of “clean room” technology to a real world problem, moving a $200 billion data market into the privacy-first era.. https://investors.firstpartycapital.com/#/contain/opportunities/manage/individual/01da3705-3649-4259-abbe-8b9b59a15679/details
Passendo: The leading category tech vendor in the email ad server space that just raised a pre-series A €2.3 million round … https://investors.firstpartycapital.com/#/contain/opportunities/manage/individual/e8b3ef90-12ec-4828-96ea-67c7be41824e/details
The FirstPartyCapital fund: A $15 million fund investing in the next wave of innovative ad tech, martech and digital media startups, predominantly at the seed stage.. https://investors.firstpartycapital.com/#/contain/opportunities/manage/individual/481a8a82-d1ac-4ea0-bdbf-551612f5a800/details
Open Roles At FPC Portfolio Companies
Passendo, Advertising Sales Manager, UK - https://apply.workable.com/passendo/j/7A99F8C481/
Passendo, Advertising Sales Manager, US - https://apply.workable.com/passendo/j/2B5EE89B87/