Ad tech company MediaMath has appointed investment bank Centerview Partners to explore its strategic options, which could include a debt restructuring or a potential sale, according to people familiar with the matter.
A MediaMath spokeswoman declined to comment.
Founded in 2007, New York-based MediaMath has raised more than $500 million in funding, and operates a demand-side platform and data-management platform for advertisers and agencies to buy and manage ad campaigns across the web, mobile and connected TV. The company’s last financing, a $225 million investment from Searchlight Capital Partners, was in July 2018.
MediaMath competes in a space occupied by much larger tech giants Google, Amazon, Adobe. It also hasn’t managed to mirror the momentum of high-flying independent ad tech company The Trade Desk, which has a current market capitalization of more than $16 billion. The buy-side portion of the ad tech sector has dramatically consolidated in recent years. Notable deals in the same include AppNexus selling to AT&T for a reported $1.6 billion in 2018, Roku’s $150 million acquisition of Dataxu in October last year.
MediaMath largely works directly with advertiser clients, while The Trade Desk has more of an agency focus. MediaMath has recently sought to gain a position in the fast-growing connected TV space, in April signing a measurement partnership with TVSquared. Another major project was the launch of its “Source” framework last year, which aims to give advertisers and publishers more visibility about the costs and mechanics of their digital advertising supply chains.
The ad tech sector was beset with turbulence and consolidation even before the coronavirus pandemic hit this year, a crisis that has caused many advertisers to dramatically pare back their marketing expenses. A swathe of ad tech companies have made layoffs. MediaMath cut its 600-plus headcount by 8% in early April, through a combination of layoffs and furloughs, AdExchanger and Adweek reported. The company also rolled out paycuts and paused 401(k) matching.
There had already been some notable turnover in MediaMath’s executive ranks in the months preceding the coronavirus crisis. In January, MediaMath hired Milena Alberti-Perez from Penguin Random House as its new CFO. Alberti-Perez reports into MediaMath president Konrad Gerszke, who himself only joined the company from Nielsen late last year. Meanwhile, co-founder and head of business development Erich Wasserman left the company in December.
Centerview Partners has advised on major media deals — including the Viacom-CBS merger and 21st Century Fox’s sale to Disney — but it’s not a well-known bank in the ad-tech space, said industry sources. Press representatives for Centerview did not respond to requests for comment.
Deals in the ad tech space has largely come to a halt during the coronavirus crisis, aside from transactions that were already close to the finish line before the pandemic hit — such as Rubicon Project’s acquisition of Telaria. There were seven ad tech mergers and acquisitions in the first quarter of 2020, down 53% on the prior quarter and 46% on first quarter of last year, according to investment bank LUMA Partners. With the economic outlook uncertain, industry experts predict many ad tech companies may be forced to sell in capitulation deals in the coming months.
“The dual pressures of working capital and the declining CPM on a take-rate business are going to drive further consolidation in” the demand-side platform space, said Richard Kramer, senior analyst at Arete Research.