Jun 13, 2023 - Economy

Exclusive: Ad tech firm Madhive raises $300M from Goldman Sachs

Illustration of a television with $100 bill on the TV screen

Illustration: Eniola Odetunde/Axios

Ad tech startup Madhive has raised $300 million from Goldman Sachs in a deal that values the company at nearly $1 billion, Axios has learned.

Why it matters: The investment signals momentum for an industry reeling from a market slowdown, and is one of the largest ad tech deals since January 2022, according to data from Luma Partners.

Details: Goldman's cash will give it a minority stake in the company as well as three of nine board seats.

  • The funding, which comes from the private equity business within Goldman Sachs Asset Management (GSAM), will be used to help Madhive expand its business and customer base.
  • The company previously raised $7 million.

Catch up quick: The company launched as Otter TV in 2015, starting as a service for advertisers to offer users mobile promotions via OTT ads.

  • It rebranded to Madhive a year later, and by 2017, began serving local broadcasters. Headcount stands at around 200 people.

How it works: The majority of Madhive's revenue comes from local TV companies, CEO Spencer Potts tells Axios.

  • Madhive makes money by licensing its ad tech software to those companies so that they can sell their own CTV ads. It also takes a cut of the transactions facilitated by media companies using its tech.
  • Future customer targets include retailers and direct-to-consumer companies.

By the numbers: Annual revenues are more than $100 million, and with a nearly $1 billion valuation, Potts says he hopes to "give a little more oxygen into ad tech."

  • The industry saw record valuations after the pandemic. It contracted last year, as advertisers pulled back spending amid a tumultuous economy.

Zoom out: Goldman's move comes as more ad dollars shift from traditional television to streaming.

  • Last year, the bank invested $325 million into iSpot, an advanced TV measurement company. In 2019, Goldman invested in Innovid, a video advertising company.

The big picture: CTV is one of the fastest-growing channels in terms of digital video ad spend, according to the Interactive Advertising Bureau (IAB), the largest advertising trade group in the country.

  • CTV ad spend grew 22% in 2022 — 37% faster than short-form video from web and app-based publishers.

Editor's note: The story was updated to include more detail about Goldman's investment.

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