This year has been a year of consolidation in ad tech, between ad servers shuttering, industry-wide layoffs and entire companies filing for bankruptcy. But in spite of that, it looks like investors are still willing to hold their nose and drop their dollars in hopes of riding the programmatic wave.
This week, three ad-tech startups announced the results of their own most recent funding rounds, with the results reaching multi-million-dollar levels. While some might argue that ad tech, in particular, is a very saturated space, investors are evidently still on the lookout for high-growth opportunities.
Security software firm Confiant raised $4.1 million, thanks to a push from River Bay Investments and Rubicon Venture Capital. Spot.IM, an engagement-centric platform for digital publishers, raised $25 million in its own most recent round of funding due to contributions from Insight Venture Partners, Cerca and others, while CTV- and OTT-focused platform VideoAmp raised a whopping $70 million, bolstered in large part thanks to The Raine Group, which calls itself “a leading global investment bank focused exclusively on media and technology.”
U.S. digital ad spending, by eMarketer’s estimates, is set to reach more than $129 billion by the year’s end even while the industry has been plagued by conversations of an impending shakedown. A few months ago, market researchers at Forrester predicted that startups would see their ad-tech investment dry up through 2019, bottoming out at $1.8 billion by the year’s end, down from a much meatier $7.2 billion the year before, a 75% drop.
The report’s author, Carlton Doty, chocked the predicted speed bump to larger companies, like telcos, consolidating their other ad-tech outfits under their corporate umbrella and to the recently enacted GDPR practices that subject startups to harsh industry scrutiny that they might be ill-equipped to deal with. And that’s not even to mention the ever-looming presence of the Facebook/Google duopoly, which squeezed more than 60% of spend from the American ad market last year.
Speaking earlier on the subject, Jay C. MacDonald, CEO of investment bank DCA Capital Advisors, told Adweek that while some ad-tech companies are experiencing harsh market realities, those with a genuine USP will thrive. “You do have the kind of companies that are struggling [to raise capital], but if you’re scaling fast then you see funding come to you,” he added.