source: Axios 06/13/2023
Ad tech startup Madhive has raised $300 million from Goldman Sachs in a deal that values the company at nearly $1 billion, Axios has learned.
Why it matters: The investment signals momentum for an industry reeling from a market slowdown, and is one of the largest ad tech deals since January 2022, according to data from Luma Partners.
Details: Goldman's cash will give it a minority stake in the company as well as three of nine board seats.
The funding, which comes from the private equity business within Goldman Sachs Asset Management (GSAM), will be used to help Madhive expand its business and customer base.
The company previously raised $7 million.
Catch up quick: The company launched as Otter TV in 2015, starting as a service for advertisers to offer users mobile promotions via OTT ads.
It rebranded to Madhive a year later, and by 2017, began serving local broadcasters. Headcount stands at around 200 people.
How it works: The majority of Madhive's revenue comes from local TV companies, CEO Spencer Potts tells Axios.
Madhive makes money by licensing its ad tech software to those companies so that they can sell their own CTV ads. It also takes a cut of the transactions facilitated by media companies using its tech.
Future customer targets include retailers and direct-to-consumer companies.
By the numbers: Annual revenues are more than $100 million, and with a nearly $1 billion valuation, Potts says he hopes to "give a little more oxygen into ad tech."
The industry saw record valuations after the pandemic. It contracted last year, as advertisers pulled back spending amid a tumultuous economy.
Zoom out: Goldman's move comes as more ad dollars shift from traditional television to streaming.
Last year, the bank invested $325 million into iSpot, an advanced TV measurement company. In 2019, Goldman invested in Innovid, a video advertising company.
The big picture: CTV is one of the fastest-growing channels in terms of digital video ad spend, according to the Interactive Advertising Bureau (IAB), the largest advertising trade group in the country.
CTV ad spend grew 22% in 2022 — 37% faster than short-form video from web and app-based publishers.