Ad tech firm The Trade Desk had its first day of trading (21 September) on Nasdaq and closed 68.61% up on its IPO price, valuing the company at close to US$1 billion. Its stellar debut could be a signal that ad tech's lacklustre stock market performance could turnaround.
There was a flurry of ad tech IPOs in 2013 and early 2014 but the ad tech space took a kicking last year after falling stock prices throughout the year. The IPO market has essentially been shut since mid-2014 which led to much speculation about the state of the entire sector. The only pure ad tech player worth more than US$1 billion is French-based performance advertising company Criteo – which has a valuation north of US$2 billion.
The Trade Desk’s shares were priced at US$18, opened at US$28.75, and closed at US$30.10. The company had initially valued the firm between US$550m and $600 million but the strong opening day takes its valuation close to the US$1 billion mark.
“This is a monumental day for The Trade Desk,” its CEO Jeff Green said.
“We are thrilled to join The Nasdaq Stock Market as we aim to continue to shape the future of how advertising is bought and sold. We remain committed to enabling every digital advertising impression to result in a win for the brand, the publisher and most importantly, the consumer.”
The programmatic advertising demand-side platform (DSP) is profitable and has been since 2012, unlike many other ad-tech firms that went for IPO in 2014. The Trade Desk’s revenue rose 155% in 2015 and it raised US$84 million in its share offer.
According to research firm IDC, roughly $640 billion was spent across the globe on advertising in 2015, of which only $14 billion was spent on real-time market places, such as on The Trade Desk. The company says it facilitated advertising spending of $552 million in 2015, giving it a 3% to 4% market share in the programmatic ad market.
Through its self-service, cloud-based platform, The Trade Desk allows ad buyers to create, manage, and optimise “more expressive data-driven” digital advertising campaigns across ad formats, including display, video, audio, native and, social, on a many devices, such as computers, mobiles and connected TV.
The firm says it will continue to expand internationally while also building more products for programmatic buying of TV ads.
AppNexus is also speculated to be close to an IPO, but it has yet to eventuate.
Is this IPO a great sign for the ad tech space in 2016? Comment below and share your thoughts.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at email@example.com