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MediaMath's bankruptcy unsettles ad tech market

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Jul 5, 2023
Illustration of hand with a disappearing $100 dollar bill.

Illustration: Eniola Odetunde/Axios

The ad tech industry is reeling over the collapse of MediaMath after it filed for Chapter 11 bankruptcy last week and reported it owes more than $100 million to other major platforms.

Why it matters: The ad tech firm has been unable to secure an acquisition or additional funding to stay afloat, directly impacting its clients and others in the ad industry and sending a chill across the sector.

Context: MediaMath is a demand-side platform (DSP) that was founded in 2007. It served more than 9,500 marketers in 42 countries, according to its website.

  • The company raised millions in funding over the years, including $225 million from private equity firm Searchlight Capital in 2018 that reportedly valued it at more than $1 billion.
  • But signs of financial distress emerged last year when it announced a recapitalization with Searchlight becoming majority owner.

Details: Throughout its history, MediaMath received acquisition offers from firms like Singapore Telecommunications and Bain Capital, but no deal was ever finalized, per a March report by Insider.

  • More recently, Viant and Verve Group emerged as potential acquirers in what would have been a "quick-sale process" facilitated by Houlihan Lokey, per Digiday.

What's happening: New York City-based MediaMath now owes millions to major ad tech firms including $12.6 million to Magnite, $10.5 million to Pubmatic, $5.3 million to Sonobi and $4 million to Xandr, according to its bankruptcy filing.

What they're saying: "The deep truth that came out of this is that a DSP model is tough. It's a low-margin, high-volume business with lots of churn that is ultimately going to continue to consolidate," Daypart.AI CEO Jeromy Sonne told The Drum.

  • "This weekend, remember the AdOps / media buyers who are logging in to transfer all of their flighted campaigns from MediaMath to [Google's] DV360," Mat Harris, vice president of product management at Activision Blizzard Media, tweeted.

Searchlight Capital declined to comment. MediaMath did not respond to a request for comment.

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