- MediaMath, a programmatic demand side platform (DSP), has filed for Chapter 11 bankruptcy protection after failing to seek out a possible acquisitor, in line with multiple media reports.
- MediaMath was one of the primary programmatic DSPs and had reportedly raised greater than $600 million since 2007. Once valued at over $1 billion, the corporate had struggled recently as recent executives were brought in to right the ship.
- Viant Technology and Verve Group were reportedly in talks to amass MediaMath, but neither deal got here to fruition, eventually resulting in the bankruptcy filing. Access to the platform was reportedly suspended as of June 30.
MediaMath’s bankruptcy filing demonstrates the difficulties DSPs can have creating wealth, particularly in a high-volume, low-margin programmatic world that demands differentiation.
Though many advertisers have been shifting their programmatic dollars away from MediaMath’s platform as the corporate’s troubles slowly became public, MediaMath’s filing indicates that the corporate owes between $100 million and $500 million to greater than 200 creditors. Among those creditors are Google, Magnite, OpenX, Pubmatic and Xandr. Magnite and PubMatic are each owed upward of $10 million, in line with MediaPost.
Those creditors, nevertheless, will likely take a backseat to outstanding wage and salary obligations — the bulk of MediaMath’s employees have lost their jobs — and secured lenders including Goldman Sachs, which had granted MediaMath a $175 million line of credit in 2017. MediaMath last yr granted Searchlight Capital a controlling ownership stake for added funding, in line with The Drum.
After bringing in former Sizmek CEO Neil Nguyen to exchange the corporate’s founder and CEO Joe Zawadzki, MediaMath continued to struggle, negotiating with several bidders for a sale, but failing to succeed in terms on a deal. However, the bankruptcy filing is a bit of a surprise, provided that MediaMath recently hired Christine Napoli as its chief financial officer and Manny Puentes as its chief technology officer.
Still, MediaMath is but one company in a growing industry. Shortly after MediaMath’s filing, research firm Technavio reported that the adtech market will increase by greater than $760 billion by 2027, as global web and smartphone penetration continues to extend. In a release, Technavio noted that demand-side platforms should see “significant” growth during that time-frame.
Yet, challenges remain: Programmatic buying remains to be battling industry concerns surrounding data privacy and transparency. While some of the dominant players, like Google and The Trade Desk, are likely too big to fail — and indeed are more likely to pick up business within the wake of MediaMath’s bankruptcy — many other smaller firms could face similar issues, in line with industry observers.
“The deep truth that got here out of that is that a DSP model is hard,” Jeromy Sonne, chief executive at agency Daypart.AI, told The Drum. “It’s a low-margin, high-volume business with lots of churn that’s ultimately going to proceed to consolidate.”
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