Sign Up For Female Investment Event; Thoughts On Habu Deal; And 60 Days & Counting
Female Investment Event On Feb 13
FirstPartyCapital will be hosting a female investor breakfast event on Feb 13. The event is supported by notable FPC LPs like Shruthi Chindalur, Victoria Usher, and Caroline Campbell.
The objective of the event is education. Women are woefully underrepresented in early-stage investment. We see it in our numbers with the breakdown of our LP base - loads of senior female leaders but not enough female investors overall.
And the stats on general investment outside of the ad tech niche bear that out:
Confidence is an issue: 73% of women haven’t invested because they don’t think they are knowledgeable enough, versus 67% of men (https://www.wealthify.com/blog/why-are-there-fewer-female-investors-than-men).
Risk aversion is high: 73% of women don’t feel confident investing their money - compared to just 58% of men (https://www.wealthify.com/blog/why-are-there-fewer-female-investors-than-men).
Better investors: And yet… women investors get better investing returns than men, with studies finding differences of 0.4% to nearly 1%. (https://www.fool.com/research/women-in-investing-research/)
The event will take place at Covent Garden Hotel on Feb 13 from 8.30 am to 11.30 am. The gathering is for all women in the industry who want to understand how early-stage investing works.
Shruthi Chindalur, an LP and advisor in the FirstPartyCapital fund and an angel investor, will join us for a fireside chat, sharing insights into her experience in early-stage investment and best practices for peers.
A panel discussion covering broader investment themes will follow this. We will post details on the panelists next week.
You don't need to be an LP in FirstPartyCapital to attend. It’s open to beginners and experienced female investors alike. And it’s free to attend.
You can book your ticket using the link below. Places are limited, so book your spot today.
FPC would like to thank our event partners for their help and support:
FLM - a leading wealth management firm
Boardwave - a specialist networking community for European software leaders
GingerMay - a specialist adtech PR agency
A Few Thoughts On The Habu Deal
There was an excellent piece by the peerless Lara O’Reilly on why the Habu deal could kickstart M&A deal activity. The premise: with signal loss across Chrome, ad tech companies must buy tech to survive in the post-cookie era.
It’s worth 5 minutes of your time. Our own portfolio company and masters of attention, Lumen, is namechecked as a potential target. A Lumen exit is inevitable at this stage.
So what does this Habu deal mean for the space? Here are FPC’s hot takes on the deal and what it means for ad tech M&A:
The clean room category is complicated: Clean rooms have been a hot topic for the past two years. Specialists have raised a lot of money. Infosum, for instance, has attracted over $85 million in funding. The problem is that the clean room category is failing to live up to the hype. The majority of them are doing sub $10 million in revenue. That may change with 3PC deprecation. But the other problem for independent players is that their competitive set now includes big tech companies (Google, Amazon, Microsoft, and Snowflake) baking in querying and interoperability as an add-on feature. Tough to compete with scaled tech. Habu could have set the price for future exits. Companies in this space should be trying to sell themselves to cloud infrastructure like Databricks (as they will go vertical). FPC doesn't see ad tech buying. Better margins elsewhere.
Signal loss will motivate buyers: Inertia can be a killer in this space. Move too slowly, and you can be eaten alive. Google's slow rollout of Privacy Sandbox gives legacy ad tech and bankers time to get deals done ahead of the full roll-out of Sandbox. Who is getting bought? ID5 is likely to be sold this year - likely to an enterprise DSP. ID roll-ups will be popular as well. Despite the talk of a signal blackout, there will be patches of addressability that ad tech can model off. PEs are hungry to do deals.
Retail media M&A will ramp up: Retail media is again a complicated space. There will be a fork in the road for retail/commerce media, segmenting the category into two different buckets: one will be the RMN, an omnichannel walled garden designed to suck up more trade spend and some incremental non-endemic ad budget; the second will be signal rich programmatic inventory aggregated and activated by ad tech at scale. Both need tech. FPC sees M&A for a Hooklogic-type product listing solutions. Stack providers that can build bespoke platforms for Tesco, Walmart et al will be in demand. Retail data specialists will also be in vogue.
AI utility helps to underpin agency capabilities: The problem with AI as a stand-alone category is that tech is becoming commoditised. There is no natural moat - except for the data powering it and super verticalised applications. Despite this, the hype is real. Publicis announced yesterday that it wanted to spend $300 million on AI. What does that mean? Most likely, acquisitions. FPC sees a raft of smallish deals ranging from $10 million to $50 million - specifically in utility and efficiencies. Also, it helps fit the AI narrative, which propels public stocks higher. Don't underestimate the public market vanity buy.
FPC companies: We will likely see one exit this year in the AI space. The other likely candidate is Lumen, but attention will get greater adoption this year. 2025, likely. As for the rest, they are all in a growth stage. We are thinking more on a 2-to-3-year time horizon. DO YOU WANT TO HEAR MORE ABOUT THIS? Well, let’s move on to the next item.
Last Chance To Get In The Fund At Current Price - Mark-Up Coming At End Of March
Our fund is currently 30% up on paper, with more mark-ups in the coming two quarters. We want to raise a few more million dollars before officially closing the fund.
We will officially mark the fund up in the coming months to reward early investors, reflecting the actual paper increase in the value of capital deployed.
What does this mean in the long run? You have less than 60 days to invest at the current price. Otherwise, you will miss out on a bump - meaning you will get less money when exits occur. And they will.
If you're in the pipeline, get your proverbial arse in gear and respond to outreach. If you are reading this and want in, click the link below.
60 days and counting. Tick. Tock. There will be more on this next week.
And on that definitive note, we hope you have a great weekend.