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Investment analysis 2021 of the AdTech industry

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Executive Summary
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What is the AdTech industry?

The term AdTech is short for Advertising Technology. This new part of advertising is responsible for helping agencies and brands to target, deliver and analyse their digital advertising efforts through software tools. AdTech companies were created in order to reach users through their mobile devices (mobile phones, tablets, smart TV…). AdTech industry companies present a unique opportunity to increase awareness of any brand.

The objectives of these types of companies, as we have said, are to help agencies and advertisers to create the highest return on advertising investment through the different technological tools available. In turn, they help publishers and ad space owners to sell their ads at the best price. Finally, they also organise advertiser demand and publisher supply across the various advertising networks.

Sector opportunities

The pandemic caused Internet traffic to increase considerably and companies saw a great need to make themselves better known through digital media. Despite this, the uncertainty caused by the virus caused many companies to save their money and not invest as much in advertising, which negatively affected the sector.

On the other hand, once the pandemic is over and markets return to relative normality, as digital advertising is so important, companies will invest more in this type of media, so AdTech industry companies will play a key role in helping clients and agencies maximise their efforts and profits. At the same time, new technology trends, such as Programmatic Advertising, will continue to be important drivers in the sector.

Funding received

The numbers shown in the report show a four-fold increase in value in 2020 compared to 2019, totalling $1.76bn. As mentioned above, the value of the funding rounds has increased considerably, being much larger than in previous years. In 2021, almost the same amount has already been raised as in 2020, with a total of $1,500M. On the other hand, the number of rounds has decreased, with a negative trend since 2016.

Investments

As the Investment Report points out, the AdTech industry is already a fairly consolidated sector, despite being a new technology sector. Investments in the sector are increasingly large, as we have said, with Private Equity investors playing a major role. Despite this, the number of investments made by Venture Capital is on the rise, with a positive trend. Moreover, it is expected to grow further due to the entry of new companies in the sector.

The graph shows the evolution of the number of AdTech industry companies invested by Venture Capital. As can be seen, the trend is positive, expecting to have the highest numbers in the sector for the next two years. In turn, as shown in the report, the numbers are higher than the Private Equity graph.

AdTech Venture Capital INvestments

On the other hand, the following graph shows the development of the number of companies invested by Private Equity, i.e. by specialised firms at later stages. The trend is very positive for the coming years. It shows a recovery in 2020, after having declined in 2019.

Investment analysis 2021 of the AdTech industry

The Report shows the top investors of each type and the type of AdTech industry companies they have invested in.

Acquisitions

In terms of acquisitions, transactions have increased, with a positive projection for the near future. The report shows the numbers of transactions in both directions: transactions by companies in the sector, and the number of companies in the sector that have been acquired.

As can also be seen, the vast majority of operations are located in the United States, with 80% of the total.  By 2024, the number of acquisition agreements is expected to reach 85.

Public companies

The report also analyses listed companies. There are 23 companies, mostly American, listed on the NASDAQ or the New York Stock Exchange, or the London Stock Exchange. These are mostly companies with less than $10M turnover. NASDAQ or on the New York Stock Exchange, or on the London Stock Exchange. These are mostly companies with less than 10M$ turnover.

The table shows the most recent exits.

Investment analysis 2021 of the AdTech industry

Investment analysis 2021 of the AdTech industry

Table of contents

Feed Summary 

  1. Sector overview 
  2. Key findings 
  3. AdTech definition
  4. AdTech vs MarTech
  5. Advertising agencies
  6. COVID-19 impact
  7. Market Segmentation 
  8. Trends
  9. SWOT Analysis 
  10. Market Forecast

Investment Trends 

  1. Funding Rounds
  2. VC Investments: Numbers and Latest VC Investments 
  3. PE Investments: Numbers and Latest PE Investments 

3. Exit Outlook 

  1. Acquisitions in Numbers: Acquirer overview and Acquire overview 
  2. M&A operations conclusions 
  3. IPOs: Recent IPOs 

4. Spanish Overview 

5. About Baker Tilly 

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