The HALO (Heavy Assets, Low Obsolescence) Effect In Ad Tech
Hello readers, and welcome to another edition of the FirstPartyCapital newsletter. The SaaSpocalypse has had a huge impact on software company valuations. This collapse in value happened mostly because of tools released by Claude and other LLMs, which automated tasks, reduced headcount needs, and forced a pivot toward AI-driven efficiency.
The public markets have taken a chainsaw to companies perceived to be at risk from the rise of vibe-coded dopplegangers. The rationale: with Claude and other LLMs, it’s now relatively easy to build software that can scale to the size of Salesforce et al.
HALO
Obviously, if you discount the deep integrations into some of the biggest companies in the world, the army of salespeople (to sell it), the army of developers (to develop and maintain it), the marketing, and all the rest of the things that go into running a multi-billion dollar software company, that would be a very sound thesis. But it isn’t.
Regardless, investors are rotating aggressively out of traditional SaaS stocks and into more durable assets. This investment trend even has a new acronym, HALO. No, not the Texas MOR pop gem from the late 90s.
HALO stands for Heavy Assets, Low Obsolescence. The crux of this new Wall Street thesis is the following: the market has shifted from “asset-light” software companies toward “real-world” infrastructure, and while AI can replace code, it cannot replace a physical railroad, power grid, or oil refinery. Heavy infrastructure-based stuff wins basically.
Could this happen in ad tech? In this newsletter, we discuss the HALO effect, why OOH is the trade and why we are investing in startups like Vendi.
OOH, The Ultimate HALO Play
You could argue, right now, that OOH is a far more interesting channel than CTV. Web-based ad tech has packed up shop and bet the farm on winning a share of the CTV ad pie. It’s become a massively overcrowded space that’s increasingly dominated by the hyperscalers.
OOH, on the other hand, has not seen the same level of hype as CTV, despite seeing over $2 billion in M&A in 2025 and expected growth of 7%-8% per year until the mid-2030s. It’s still relatively open in terms of opportunity. Innovation can still win.
But what’s really interesting is the channel’s robustness in the face of AI disruption. It is the ultimate HALO channel. Here are a few snackable reasons as to why it’s an essential go-to for marketers in an age of unpredictable AI change:
Real-world scarcity FTW: AI can create infinite websites and digital ads instantly, but it cannot vibe-code a new junction, making existing physical signs more valuable as digital space collapses.
The trusted channel: In a world flooded with fake AI-slop content and growing trust issues, owning a massive physical billboard signals that a brand is legitimate, solvent, and has the resources to operate offline.
The emotional quotient: In a media landscape fragmented into a million pieces, brand equity is hard to come by. The billboard becomes a watercooler moment - the ultimate mid-to-upper funnel moment that drives the user to the prompt. The ultimate brand building and HALO crossover.
Part of our real-world landscape: While AI agents now automatically hide or summarise digital ads for users, they cannot “block” a massive physical structure standing in the real world as you pass.
Infrastructure built over decades: While social media apps and websites go viral and die within months, these steel-and-glass structures are integrated into infrastructure, providing a predictable source of longevity for media buyers.
Vendi - Our Latest HALO investment
This, of course, segues beautifully into the syndicate fund raise we are currently running for Vendi Tech. Vendi provides “smart” vending machines to some of the UK’s largest pub, gym, and retail brands.
It produces automated product dispensers and works with brands to distribute physical products to targeted audiences. It then uses this first-party data to power a DOOH offering.
Fixed physical asset - with utility - serving a non-intrusive DOOH display. Vendi is the ultimate HALO play. The more you think about this, the more you realise how valuable companies like Vendi will become - as people seek out real-world spaces (pubs, gyms and retail) to escape the AI-powered digital pollution that dominates daily life.
The Vendi Tech deal is now live here: https://investors.firstpartycapital.com/deal/detail/bf795272-1906-42b1-b223-630dc2563820. It’s time,e you had an AI hedge.
FPC Fund 2 will be making an investment after we finish this syndicate round. Here are the reasons why we are investing:
Vendi sits at the intersection of retail media and OOH. It is already working with major gym, pub, and retail brands, helping build new incremental revenue streams through its automated vending machines. Its product-dispensing solution enables brands to engage a targeted audience. Layer on top of that a data-driven OOH ad network, and you have a sticky, profitable ad tech play. Once embedded, it’s hard to displace.
The Vendi Team: Harry Maitland-Titterton, Vendi CEO, has extensive experience in the retail sector. This led him to identify a significant market gap in the automated vending machine space. He launched Vendi in 2023 and has since signed several major retail brands. As the product evolved to a first-party data and OOH solution, Harry surrounded himself with some of the smartest people in ad tech.
Vendi is primed for scale. The company has nailed the unit economics on its machines and has built its ad stack to help brands reach new audiences. Now its core customers want it to expand into Europe and beyond. Honestly, it is hard not to get excited about Vendi - and the opportunity that lies ahead for Harry and team. This is a proper, moat-heavy industrial ad tech. Steel, glass, product and OOH ads. Ridiculously investable.
The best companies in ad tech are utility solutions with a margin-heavy and scalable ad business bolted on. Think Uber and PayPal - but for OOH. As with its peers, Vendi’s utility feeds into its advertising offering.
Vendi is quintessential ad tech value investing. With a unique fixed supply and proprietary party data, Vendi is a business with a higher likelihood of delivering a return to investors.
From an M&A perspective, the OOH space is buoyant. In 2025, there were over $2 billion in transactions. OOH is a growing sector. In the age of chatbots and Q&A search engines, OOH becomes existential for brand building as the lower funnel collapses into a prompt.
EIS cover on this deal for UK investors. Tax rebates are available on this raise.
And that’s it, readers. Have a great weekend. Stay safe.