Ad-Tech Firm DataXu Hires Bank to Explore Possible Sale

By Lara O'Reilly 

Advertising-technology company DataXu is exploring a potential sale, according to people familiar with the matter.

The Boston-based company -- which offers software to help marketers use data to target audiences across the web, apps and television -- is working with investment bank GCA Advisors LLC on the process, the people said. The ad-tech company is initially seeking a valuation of around $300 million.

DataXu didn't respond to requests for comment. GCA declined to comment.

DataXu was founded in 2009 and has raised around $87.5 million in funding, according to funding-data provider Crunchbase.

Its investors include European pay-TV giant Sky PLC and venture-capital firms Flybridge Capital Partners, Menlo Ventures and Thomvest Ventures. DataXu has about 400 employees, according to an October report from market-research firm Gartner.

Once a hot space after several companies' share prices soared following initial public offerings, ad-tech cooled for investors as it became commoditized and stocks in many players took a hit.

Ad-tech companies are also up against the "duopoly" of Google and Facebook, which are projected to take a 44% and 21% share, respectively, of the digital ad dollars spent in the U.S. this year, according to market research firm eMarketer.

There were 46 deals in the ad-tech space in the first three quarters of 2018, according to advisory firm Results International, which defines a deal as any transaction where a company takes at least a 40% stake in another. That was down from 70 in the equivalent period a year earlier.

There have been some recent success stories in the space. Public ad-tech company the Trade Desk is one of the sector's star players, with a market capitalization of around $5 billion. In July, MediaMath raised $225 million in funding. AT&T completed its approximately $1.6 billion acquisition of ad-tech firm AppNexus in August.

Private-equity and cloud-computing firms have been involved in a number of recent ad-tech acquisitions. Television and telecommunications companies increasingly are looking to advertising technology to modernize their ad offerings to marketers, and to put their viewing and subscriber data to work to help monetize their content.

DataXu, which operates what is known in the industry as a demand-side platform, recently has begun to focus more on television. In September, for example, the company introduced a product called TotalTV for Advertisers to help marketers plan and buy ads across both traditional and streaming television.

Write to Lara O'Reilly at lara.o'[e-mail]

(END) Dow Jones Newswires

October 17, 2018 17:16 ET (21:16 GMT)

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