Special Purpose Acquisition Companies (SPACs) are becoming a popular way to do an IPO. It is “essentially a shell company set up by investors with the sole purpose of raising money through an IPO to eventually acquire another company”, reports CNBC.
It’s how Taboola finally went public this summer, and how AdTheorent went to market in a deal valuing it at $1 billion.
In this video interview with Beet.TV, Nick MacShane, senior managing director at M&A advisory Progress Partners, explains why the route is becoming so popular.
“That is presenting a number of other companies that might not feel they have all the juice to go public a second option to get into the public market,” says MacShane, whose Progress Partners advised on deals including Signal’s sale to TransUnion and RTK’s to Rubicon Project.
In a SPAC, a company merges with an existing entity in a capital plan to grow the return on floatation, aiming to fund future M&A.
What is a SPAC? Explaining one of Wall Street’s hottest trends (via @CNBCMakeIt) https://t.co/KVSlKFwnGQ
— CNBC (@CNBC) January 30, 2021
MacShane says of ad-tech’s public-markets aspirants aspirants: “They may have flattened out, in terms of their growth. They may not have quite the story, the future story that the public market is looking for.
“You’re starting to see some of those companies now poke around and look for add on companies to merge with them, to then bring to market a better story.
“We’re seeing a tremendous amount of activity there with companies really looking for partners.”
All of which is putting ad-tech M&A back on the map.
In recent weeks, Beet.TV alone has written about IAS buying Publica and Mediaocean buying Flashtalking.
The bounce-back was happening before SPAC’s became fashionable.
Even so, it seems the days of investors burned by failed ad-tech IPOs are behind us.
“In the last year or so we’ve had about 10 to 15 companies meaningfully move into the public market,” says Progress Partners’ MacShane.
“What that’s doing is creating a bunch of liquidity, which is giving opportunities for those companies once they go public to think about where they may want to go further to continue to maintain their strength as a public company,” he says. “That’s fueling some acquisitions.”
He credits private equity firms as being more agile and willing to put money into ad-tech than larger institutional buyers, who are “struggling restarting their engines” after COVID-19.
Twelve-year-old Progress Partners has also closed a venture round of its own, having previously invested in the likes of MediaMath and Simpli.fi.
You are watching “Innovation, Leadership, and Value Creation: Strategies Explored,” a Beet.TV leadership series presented by Progress Partners. For more videos, please visit this page.
]]>That is what Nick MacShane believes could pan out.
In this video interview with Beet.TV, the founder of media- and tech-focused M&A advisory Progress Partners says the new audio landscape is opening up to advertising.
It is a landscape buoyed by several advances:
No wonder MacShane sees an opportunity:
And there is further investment activity bubbling up. “We are looking at some companies right now,” MacShane says. “We actually talk, probably, to two to four voice companies a week and are also certainly talking to all the different suppliers and other participants in that ecosystem on a regular basis.
“We are looking at making an investment shortly in a company called Instreamatic.”
Instreamatic enables listener microphone response to streamed audio ads, making for an interactive experience, like conversing with a smart speaker.
“Based on that response, the unit itself can then trigger the sending of a message, a text message, connect you with a phone centre, a call phone centre or send you directions directly to your device,” MacShane says.
That’s the theory. Instreamatic’s technology is available to any sound-enabled app including music, radio, podcasting, gaming, messaging and more.
To fully realize the opportunity, however, will require audio service app makers to plug in such capability.
“I think that what will drive the openness of these platforms will be the financial backers, the advertisers,” MacShane adds. “That’s generally been the driver to allow the platforms to be more open and porous in terms of the data they’re sharing back out with their constituent partners. Once certain platforms start to share that information, the others will quickly follow.”
We did a big research project with the teams at @Mindshare_USA, @PandoraBrands, @tunein, and @mfourmobile, and we’re excited to share the results.https://t.co/wbOPB3zl0S
— Instreamatic (@instreamatic) October 6, 2020
Spotify made €185 million from advertising in Q3 2020 alone.
MacShane is also putting such technology on the radar of even bigger tech companies.
“You have various platforms right now who are vying for attention,” he says. “Apple has Siri and Amazon has Alexa and Google has the Google assistant and Samsung has Bixby. Each of these companies is going to need to try to attract content and consumers, and then monetize that in some form.
“And the advertising market, as much as people may dislike advertising and the interruption of advertising, that is a significant financial driver for these kinds of businesses.”
You are watching “Advertisers: Turn Up the Volume on Streaming Audio,” a Beet.TV leadership video series presented by Tru Optik. For more videos, please visit this page.
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