Peter Kafka

Recent Posts by Peter Kafka

Another Big Money Bet on AdTech: PubMatic Raises $45 Million From August Capital

After a few years of infatuation, many investors have grown out of love with ad technology companies. But a handful of ad tech businesses continue to garner very big bets and are making noises about going public.

Here’s the latest: PubMatic, which has just raised a $45 million round led by August Capital. Previous investors Draper Fisher Jurvetson, Nexus Venture Partners, Helion Ventures and Silicon Valley Bank, who had put $18 million into the company, also came back for this one.

PubMatic helps publishers manage their display ad inventory, and argues that it can help get them better prices from ad buyers who are using tech tools designed to push prices down. The company won’t disclose its revenue but CEO Rajeev Goel says PubMatic processes “tens of billions” of ad impressions a month, and that the sites it represents collectively attract 400 million visitors a month.

The company has two primary independent competitors — AppNexus and the Rubicon Project — both of which are also heavily funded, and both of which are making noises about a public offering.

If you’re a skeptic, you could argue that they have no choice but to head that way. That’s because Google bought their competitor AdMeld last year, and because the other big display ad companies that would have been logical buyers at one point — Yahoo, AOL and Microsoft — don’t seem to be in the market for big display ad tech purchases.

Can all three of these companies work as a stand-alone? Sure, says Goel, who says he thinks there’s room for even more. “I think there will be much more than one that can go public.”

And if you don’t like that bet, you can find all sorts of other theoretical candidates who might be in the market for a PubMatic-sized purchase. Amazon, for instance, is trying to figure out how it wants to play in the ad business, and Business Insider linked PubMatic to Jeff Bezos and company last year.

Here’s a quick chat I had with Goel this afternoon — no idea what the weird light display is behind him, but I guess the Essex Hotel is trying to jazz up its meeting room decor — where we talked about some of this. I also tried to get him to explain his business in terms a regular person might understand. I think I did okay.


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