Participants include VC firms such as previous earlier backers Archer Venture Capital, Foundry, private equity outfit Lexington Partners as well as Progress Ventures and Structural Capital, among others.

Sovrn’s CEO Walter Knapp claimed his company was able to raise the Series C round following the company’s sustained profitability, including “year-over-year revenue growth for the past seven consecutive quarters and 13 out of the last 14 quarters” according to a press release.

While some say that a week is a long time in politics, then (if true) a year is an eternity in corporate development. And there are few sectors of the media industry where that dynamic is more clearly on display than ad tech.

The rate of public listings in the sector last year was frenetic with companies in the sector seemingly spoiled for choice when it came to the opportunity to float on the stock markets. According to investment bank LUMA Partners, the number of ad tech and martech stocks traded on exchanges such as Nasdaq or the New York Stock Exchange is now double that compared to pre-Covid times.

Simultaneously, numerous PE firms were also in the market for ad tech firms but the appetite among both public and private investors has waned. Most publicly traded stocks in the sector are now trading at significantly below their launch price while the deal flow in the private sector has since slowed to a trickle.

“Last year I was watching people grow at all costs and companies felt they [had to] raise lots and lots of money, there was less discipline from the investment community and valuations were quite high,” Knapp told Digiday, who later described the situation 12 months ago as an “abnormal environment.”

Multiple sources note how investors have gradually grown more conservative in their outlook as the global economic outlook has grown more austere albeit interest remains in those companies that can demonstrate growth.

Speaking recently with Digiday, Lee Puri co-founder and chief growth officer at MiQ noted increased caution among PE firms over the course of the year as his company continues to search for such a backer.

He went on to add that while there will be “a restriction of valuations for the next 12-to-24 months,” those companies that can prove their ability to maintain revenue growth in a challenging economic environment will remain desirable.

“Valuation are being squeezed now,” Puri added, “we’re on the precipice of a pretty meaty recession …read more

Source:: Digiday

Author: Aaron