Ad firm Pubmatic raises $45 million; is an IPO on the horizon?


Credit: Corbis / Don Mason

The ad tech world is incredibly cluttered and fragmented. But in some pockets of the ecosystem, there are signs of consolidation.

In an announcement today, digital media platform PubMatic said it has raised $45 million in mezzanine financing. The Redwood City, Calif.-based company said Wednesday that new investor August Capital led the round, with participation from all existing investors, including Draper Fisher Jurvetson, Nexus Venture Partners, Helion Ventures and Silicon Valley Bank. With the new funds, which follow about $18 million previously raised, the company said it plans to continue its acquisition strategy and strengthen its balance sheet.

“The marketing automation landscape is overly fragmented with too many point solutions,” said Rajeev Goel, Co-founder and CEO of PubMatic. The company is eyeing buys in the mobile, video, data and brand control sectors that will build out its position in relation to competitors like Rubicon Project, he told Adweek.

PubMatic’s not the only one with acquisition on the brain. Two weeks ago, Rubicon Project bought mobile ad tech platform Mobsmith. And then there’s the Oracle-Vitrue deal and the announcement this week that Salesforce bought Buddy Media. Some expect even more consolidation in social media marketing. While new companies and technologies will no doubt continue to emerge, as the industry matures and business models really get tested, it makes sense that at least parts of the system get ironed out.

Launched in 2006, PubMatic gives publishers a platform for evaluating and selling their display ad inventory. Between its real-time bidding and analytics, the company says it can help premium publishers fetch higher prices. It in addition to Rubicon Project, PubMatic also competes with New York’s AppNexus, as well as Admeld, which was bought by Google last summer for a hefty $400 million.

Over the past few years, Rubicon Project and AppNexus have also raised significant financing rounds. Without the possibility of Google as an acquirer, there is speculation that all three are possibly eyeing IPOs down the road. To the question if there’s room in the market for all three to make a public debut, PubMatic’s Goel told tech blog AllThingsD, “I think there will be much more than one that can go public.”

Forrester Research analyst Michael Green said PubMatic’s recent funding raise is a natural progression for them. “It speaks to me of this overall trend that we’re going to see in the ad tech world — that a lot of companies that haven’t found a big strategic acquirer are looking at possible IPOs,” he said. “It’s a pretty good indicator that companies in this space are looking toward their future.”

Comments are closed.