Ad Tech Valuations


Terence Kawaja from LUMA Partners, an investment bank, has some very insightful comments around current ad tech valuations.  It wasn’t too long ago that everyone was claiming that the ad tech party was over, citing poor IPO’s by Millennial Media, Tremor Video, and YuMe.  But fast forward to today, and you can point to successful IPO’s by Rocket Fuel and Criteo along with some high profile acquisitions (Adap.TV by AOL, and MoPub by Twitter), and say that the party is back on.

LUMA Partners’s analysis shows that forward revenue growth and forward revenue multiples are highly correlated, which demonstrates investors premium on growth.  However, it’s the “valuation vectors” that put additional context around different valuations, depending on the business models.  For example, “Network 1.0” companies such as Tremor Video (campaign-based models serving as middlemen between advertisers and publishers, and earn profits from the spread between media bought versus sold) trade on a lower valuation vector, 2x-4x forward revenue, than “SaaS” companies such as Marketo (contractually recurring monthly software fees with no regard to media, which is the most predictable), that trade 8x-15x forward revenue, with the slopes reflecting scale and operating leverage.

From a deal perspective, this analysis is interesting and and suggests that companies can use M&A to improve their position, pointing to ValueClick’s acquisition of Dotomi at ~5x forward revenue (a comparable of Criteo) as improving its positioning, and Millennial Media’s recent acquisition of JumpTap (~4x forward revenue) also helping its valuation. 

The post from Re/code by LUMA Partners can be found here with the complete SlideShare below 

Christopher Chiou

Bay Area based for 12 years and originally from the NYC area. My career has been spent as a technology dealmaker, advising clients on M&A and capital raising, and as a principal investor backing great companies and teams. I'm passionate about technology trends, traveling, sports, politics, Knowledge, and Duke basketball.


  1. Surfing the Internet is a very enjoyable thing to do, but in order to
    be able to this you need to choose the proper Internet speed that will
    allow you to do what you want or need to accomplish. Laddertray is
    most widely used in the construction of commercial construction projects and
    light industrial applications. If we used that signal to drive
    a speaker to run in the same 1000hz frequency with the same amplitude, we would hear that sound through the speaker.

  2. Connecting rod bottom end bolts keep the two halves of the bottom
    end bearing together. The red wire connects to the constructive (+) aspect
    of the battery and need to have a fuse (of an proper dimensions for your
    amp) within 45 centimetres, or eighteen inches, of
    the battery. To break into such a safe, if a thief knows where
    the bolts are located on the door, he just has
    to drill through and hammer on the bolts to make them recede.

Leave a Reply

Your email address will not be published.