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Q2 2015 Market Report LUMA partners Digital Brief 003
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Q2 2015 Market Report
LUMA partners
Digital Brief 003
Mobile
LUMA’s Singular Focus on Digital Media
Technology
Media
Marke2ng MarTech
Digital Content
Ad Tech
Ø LUMA’s exper,se is at the intersec,on of Media, Marke,ng and Technology
Ø At this intersec,on exists: § Digital Content: content sites, MCNs, game publishers, aggregators
§ Ad Tech: display, search, video, mobile, social, content marke,ng/na,ve, connected TV
§ MarTech: data, analy,cs, sales and marke,ng automa,on, email, predic,ve tools, commerce technology, shopper marke,ng, payments
Ø Mobile prolifera,on has a major impact on these markets and LUMA is deeply knowledgeable on mobile
Overall Commentary on Consolidation Ø In our first Market Update (click here hKp://
bit.ly/1Hqqbqd), we reported 59 acquisi,ons in digital media, highlighted by strategic buyers in Commerce, Ad Tech and Consumer Internet
Ø The deals we track in this report fall into one of four categories: § Large (over $500 mm) § Medium ($100 – $500 mm) § Small ($20 – $100 mm) § Sub $20 mm exits are considered tech and team deals,
capitula,ons, or undisclosed
U.S. Digital Media M&A Activity by Sector
Source: LUMA Partners
# of Transac2ons
Ø Digital media M&A picked up this quarter with 16 more acquisi,ons from last quarter and 19 more compared to the same period last year
31 25 21 22 23
11 13
13 14 21
14 15 16 23
31
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Ad Tech MarTech Digital Content
A Growing Robust Pool of Strategic Buyers
Ø So^ware solu,ons that enable decisioning of consumer data is a capability that aKracts deep pocketed strategics from a wide variety of industries
Ø Many companies from Ad Tech and MarTech have developed these capabili,es
MARKETING TECH
CRM SOFTWARE
INTERNET ORIGINALS TELCO
MARKETING
MEDIA
DATA
CONSUMER INTERNET
TECH SERVICES
COMMERCE
Right Time Decisioning of
Consumer Data
(Ad Tech and MarTech)
Digital Media M&A Activity by Strategic Buyers
Source: LUMA Partners
Q2 2015
Ø The most ac,ve strategic buyer categories were Telco, Marke,ng Technology, Media, and Consumer Internet, represen,ng over 48% of all deals in digital media and marke,ng this quarter
Ø A^er siang out last quarter, Telco companies including Comcast and Verizon led some of the industry’s most significant deals
Strategic Buyers Transac2ons
11%
7%
11%
22% 15% 4%
15%
11% 4%
Consumer Internet Commerce Telco Media Marke,ng Tech Tech Services Internet Originals CRM So^ware Marke,ng
Total Transac2ons = 75
Ad Tech M&A Activity
Source: LUMA Partners
Ø Observa2ons § Ad Tech M&A con,nued with 23
acquisi,ons this quarter § Of the 23 deals, 6 involved
mobile adver,sing and app marke,ng
Ø Looking Ahead – Loca2on Tech
§ With the prolifera,on of mobile devices, marketers are trying to find a reliable iden,fier to target consumers across devices
§ We expect to see consolida,on focused on loca,on data which serves as the mobile equivalent to the web cookie that enables rich mobile targe,ng
# of Transac2ons
8 9 5 3 3
23 16
16 19 20
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Over $100mm Under $100mm
Ad Tech – Notable Deals Acquirer Capital
Raised Enterprise
Value Comments
Source: Crunchbase
N/A $4.4bn With AOL’s adver,sing technology, Verizon will be able to mone,ze its customer data through more advanced cross-‐device targe,ng
$33mm N/A The acquisi,on of mobile ad serving and measurement company Medialets represents WPP and the agency world’s mission to provide more technology services to marketers
$40mm $720mm Vista Equity Partners acquired Mediaocean, a leading workflow and planning automa,on company, to further develop its digital video and TV products
$10mm N/A By acquiring analy,cs company Proximic, ComScore now has pre-‐bid solu,ons that offer greater transparency in programma,c adver,sing
$18mm $533mm TwiKer’s mobile ad capabili,es will become more sophis,cated a^er integra,ng with TellApart’s retailer-‐focused retarge,ng technology
$33mm N/A Comcast’s acquisi,on of Visible World marks the company’s early investments in addressable and programma,c TV
MarTech M&A Activity
Source: LUMA Partners
Ø Observa2ons § Social “LUMAcorn” Sprinklr
con,nued its M&A tear with three transac,ons (NewBrand, Scup, GetSa,sfac,on)
§ NetSuite entered digital marke,ng with acquisi,on of ESP Bronto
Ø Looking Ahead – Predic2ve Tech § Predic,ve analy,cs deals
ramped up in Q2 (C9, Applied Predic,ve Technologies, Coldlight, Spliporce)
§ We expect predic,ve analy,cs to be a hot area across tech ver,cals – including sales & marke,ng
# of Transac2ons
4 2 3 2 7
7 11 10 12
15
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Over $100mm Under $100mm
MarTech – Notable Deals Acquirer Capital
Raised Enterprise
Value Comments
Source: Crunchbase
$154mm $600mm MasterCard acquired Applied Predic,ve Technologies which offers cloud-‐based predic,ve analy,cs that are used for marke,ng and pricing strategies
N/A $395mm The acquisi,on of Borderfree provides Pitney Bowes with marke,ng and interna,onal e-‐commerce technology as the company expands into digital commerce services
$0 $200mm NetSuite will integrate Bronto’s marke,ng automa,on system with its SuiteCommerce technology, a cloud-‐based omni-‐channel commerce plaporm
$36mm N/A InsideSales.com will combine its cloud technology with C9’s predic,ve analy,cs to create the first predic,ve cloud solu,on that addresses the en,re sales funnel
N/A $4bn The acquisi,on of Dealertrack and its digital marke,ng services for dealerships will enable Cox Automo,ve to create a broader suite of tools for the automo,ve industry
N/A $5.3bn Informa,ca, a leading enterprise data integra,on vendor, will be taken private to focus on its cloud integra,on and data management offerings
$37mm N/A The merged company Magne,c will combine first and third-‐party data to give clients a complete view of their marke,ng campaigns throughout the customer life-‐cycle
Digital Content M&A Activity
Source: LUMA Partners
Ø Observa2ons § Technology is transforming
publishing from an art to a science, driven by data
§ There were 5 deals involving publishers acquiring new ver,cals and technology
Ø Looking Ahead – Deep Linking § Google and Apple will debut
deep linking in their next major OS releases to enable seamless user experiences across apps
§ Deep linking will have a transforma,ve impact on distribu,on and mone,za,on of apps and digital content
# of Transac2ons
2 4 3 9
2
12 11 13
14 29
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Over $100mm Under $100mm
Digital Content – Notable Deals Acquirer Capital
Raised Enterprise
Value Comments
Source: Crunchbase
N/A N/A Alibaba sold its U.S. shopping site 11 Main to Open Sky in a deal that shows Alibaba’s con,nued interest in penetra,ng the U.S consumer market
N/A N/A Uber has acquired some of Microso^ Bing’s mapping technology in order to create its own proprietary map as it tries to build a full stack product
$289mm $1.5bn By buying online learning company Lynda.com, LinkedIn is adding educa,on to its core business of connec,ng job seekers with new opportuni,es
$24mm ~100mm Microso ̂ has acquired 6Wunderkinder, the maker of to-‐do list app Wunderlist, to add another popular app and team to its growing porpolio of consumer focused products
Q2 2015 Stocks Performance – Ad Tech Ø Ad Tech Enjoys Posi2ve Quarter
§ Investors have finally warmed up to the sector. Ad tech stocks were collec,vely up 3% at the end of the quarter
§ Only three stocks are trading down a^er only three stocks traded up in Q1
Ø The Verizon-‐AOL Ripple Effect § Verizon’s acquisi,on of AOL and
its programma,c adver,sing technology is expected to have a posi,ve ripple effect on the sector
Note: Market Data as of 6/30/15
-‐40%
-‐30%
-‐20%
-‐10%
0%
10%
20%
30%
40%
01-‐Apr-‐15 15-‐Apr-‐15 29-‐Apr-‐15 13-‐May-‐15 27-‐May-‐15 10-‐Jun-‐15 24-‐Jun-‐15
MM TUBE RUBI TRMR MXPT YUME FUEL CRTO MRIN
Q2 2015 Stocks Performance – MarTech Ø MarTech Rebounds
§ MarTech stocks climbed 5% this quarter a^er falling 2% in the prior quarter
Ø Highlights § Marke,ng and sales automa,on
companies (CRM, MKTO, HUBS) con,nue to lead the sector
§ Together they were up over 41% this quarter
Note: Market Data as of 6/30/15
-‐40%
-‐30%
-‐20%
-‐10%
0%
10%
20%
30%
40%
01-‐Apr-‐15 15-‐Apr-‐15 29-‐Apr-‐15 13-‐May-‐15 27-‐May-‐15 10-‐Jun-‐15 24-‐Jun-‐15
CRM MKTO HUBS BCOV BV CTCT DWRE JIVE
Key Startup Financings to Watch Lead Investor Capital Raised Valuation Comments
Source: Crunchbase
N/A $63mm $1.2bn AppNexus’ latest round of funding will aid its expansion into the fast-‐growing programma,c video market
$100mm N/A Banjo is ramping up its enterprise-‐class, real-‐,me data products a^er successfully transi,oning from its consumer-‐facing origins
$210mm $2bn Business management company Domo, which lets users connect and visualize data, came out of stealth in April with a run-‐rate of $100 million and 1,000 customers
$186mm $11bn Pinterest is rolling out its highly an,cipated “buy buKon” to enable users to directly purchase products from the social bookmarking site
$125mm N/A RetailNext, a retail analy,cs company that collects data from in-‐store cameras, smartphones, and POS systems, plans to expand interna,onally
$160mm $2.8bn In just two years, popular workplace messaging app Slack has over one million daily ac,ve users and is growing 5% every week
$526mm $8.5bn Spo,fy closed another large round of funding amid increased compe,,on and as it plans to expand into digital video for the first ,me
N/A $100mm $1bn Twilio, a provider of cloud communica,ons infrastructure, surpassed a $100 million run rate last year and works with over 500,000 developers
Introducing the LUMAcorns
corn
What do you call a startup on the LUMAscapes that makes it to the $1 billion valua,on mark?
LUMA’s Recent M&A Deals Ø LUMA Ac2vity
§ LUMA announced the MyBuys merger with Magne,c, following the Yieldex sale to AppNexus
Ø A Look Ahead § We have never been busier and
an,cipate a rise in the number of deals coupled with an increase in the size of deals as industry consolida,on con,nues or even accelerates
LUMA’s Differentiated Value Proposition
Ø LUMA has developed a differen,ated value proposi,on based on: § Focus § Exper,se § Objec,ve Credibility § Trust § Performance
Ø LUMA has built a differen,ated global brand
Ø We leverage our brand to op,mize financial and strategic objec,ves of select quality clients
LUMA partners
LUMA’s Differentiated Strategic Approach Ø Rather than pitch inventory, LUMA op,mizes outcomes for quality growth companies by making matches with strategic buyers
Ø This approach makes LUMA an excellent choice if companies receive inbound interest
ST
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GIC
Exis,ng Assets
Industry Trends
Compe,,ve Landscape Strategy Capabili,es
Build
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Partner Target
Selec,on
Due Diligence
Ini,al Approach
Nego,ate Transac,on
Close Transac,on Integra,on
Geo or Size Filter
TAR
GE
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LUMA partners
Acts as consultant to strategic
decision makers
Acts as banker to target
company
A"Valua'on"Framework"for"the"Ad"Tech"Sector"
Color by Numbers:
May$2014$
DISCLAIMER: LUMA Securities, a wholly-owned subsidiary of LUMA Partners, has acted as co-managing underwriter for and may pursue underwriting or other advisory assignments with companies mentioned in this report or in the sector.!!
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