The ad tech company Infillion was identified as the top contender to acquire the recently insolvent DSP MediaMath during bankruptcy proceedings on August 23. Given that the company was originally valued at $1 billion, the company’s winning bid of $22 million was a great deal. According to Digiday, MediaMath CEO Joe Zawadski’s investment fund company, AperiumVentures, provided advice on the acquisition. Additionally, he sparked the idea that the ad tech expert would try to get back in touch with the business he created more than 15 years ago. According to court records, Genius Sports, a London-based provider of sports data and video streaming, placed the second-highest bid for MediaMath assets for $20.55 million.
On June 30, MediaMath submitted a Chapter 11 petition. The DSP service provider has a new home thanks to Infillion’s acquisition. The Delaware bankruptcy court accepted Infillion’s cash offer for MediaMath’s DSP and DMP holdings on August 23. One of the ad tech stories this year has also been concluded by a bankruptcy filing. Dozens of businesses have lost money as a result of one of the most well-known names in ad tech’s Chapter 11 procedures. Some others even speculate about what it indicates for the most vibrant industry in digital media.
MediaMath has 16 years of experience in the ad tech sector. However, it has recently had trouble keeping up with rivals like Google, Amazon, and The Trade Desk. It was unable to collect the required cash despite seeking more money a while ago this year and almost concluding a $70 million deal with a possible acquirer. The upshot was that the business filed for bankruptcy, which unfortunately resulted in the loss of nearly 300 employees.
MediaMath was one of the early pioneers in ad tech. It is usually regarded as the very first DSP in the sector. Thus, MediaMath’s surprising Chapter 11 filing roughly two months ago is what prompted the sale. This dramatic tale comes to a close with Infillion’s acquisition as the company’s former customers left. For the latter, the Infillion-MediaMath merger represents a remarkable fall from grace. Infillion will provide a modest 2% of MediaMath’s peak value.
Infillion’s Acquisition of MediaMath
It makes sense for Infillion to include MediaMath in its ad tech portfolio. The location data business Gimbal and the video ad tech platform TrueX gave birth to the video advertising platform. It focuses on the interactive advertising units that Gimbal purchased from Disney. A year ago, Gimbal and TrueX changed their names to become Infillion.
The 15-year-old demand-side platform that MediaMath brings to the story will enable Infillion’s programmatic ad tech stack to take shape. However, the business revealed in its bankruptcy filings that it owed over $125 million in trade obligations to a number of corporations. They include Google, Microsoft’s Xandr, and ad tech firms including PubMatic and Magnite. What will transpire to these outstanding invoices is still up for discussion as Infillion might be interested in rekindling those ties. Infillion is yet to confirm the accountability for MediaMath’s outstanding debt.
Infillion’s founder and executive chairman, Rob Emrich, stated that the company anticipates MediaMath would be in a good spot to expand under new management. In the course of the auction on Wednesday, Emrich expressed his opinion that over the following five years, the MediaMath tech stack will produce $1 billion in inventory traffic, data fees, and hosting contracts.
Our current financial model calls for an additional $30 million There will be operating losses in the next three years as we bring this business back. Plus an additional $40 million In working capital.
In any case, Infillion seems certain that it can resurrect MediaMath’s advertising technology and start a new chapter. Whether the acquisition turns out to be profitable or a major oversight on Infillion’s part, only time will tell.
In a surprising and unforeseen development, MediaMath, a renowned programmatic advertising demand-side platform, has made the shocking announcement of its immediate shutdown, sending shockwaves throughout the advertising industry. This unexpected turn of events has left advertisers, agencies, and customers in a state of chaos as they urgently seek alternative solutions to fill the void left by MediaMath.
The Rise and Fall of Mediamath
MediaMath founded in 2007, is a trailblazer in programmatic advertising, revolutionized brand-audience connections with its advanced demand-side platform. By leveraging data-driven insights and real-time bidding decisions, MediaMath enabled precise audience targeting, efficient campaigns, and improved ROI. Through strategic partnerships and a commitment to transparency, MediaMath shaped the digital advertising landscape, earning a solid reputation in the industry.
Since its founding, MediaMath had raised over $600 million and boasted an impressive client base of 3,500 brands and agencies. However, the anticipated successful exit through going public or acquisition never materialized. To address financial challenges, MediaMath had to recapitalize with Searchlight Capital last year, resulting in the loss of equity for early shareholders, including co-founder Joe Zawadzki. Additionally, the company had an outstanding $150 million credit facility from Goldman Sachs. Despite rumors of potential acquirers such as IBM, Magnite, Amazon, Tremor, and IPONWEB, MediaMath struggled to find a suitable buyer.
It is expected to file for Chapter 7 bankruptcy. This will result in asset liquidation to repay obligations. After settling wages and salaries, primary lender Goldman Sachs will be paid, followed by other creditors if there are remaining proceeds from asset sales. Most of MediaMath’s 300+ employees will lose their jobs, with a small team retained for essential functions during the bankruptcy process.
Impact on advertisers
The abrupt shutdown of MediaMath has caused significant upheaval among advertisers and agencies. These entities now face the daunting task of finding alternative platforms to relocate their ad campaigns, requiring substantial resources and adjustments. The loss of MediaMath’s tracking pixel has further compounded the challenges, hampering the ability to analyze user behavior and optimize future campaigns. The lack of prior notice has intensified the difficulties faced by advertisers and agencies, emphasizing the need for clear communication during times of distress.
In the meantime, the closure of MediaMath creates an opportunity for other DSPs such as The Trade Desk, or Google to step in and fill the void. The demise of the DSP is seen as a setback for the ad tech industry, and industry insiders express sadness over the company’s fate.