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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, Kerry writes.

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.

MediaMath's bankruptcy unsettles ad tech market

1 big thing: MediaMath bankruptcy 

Illustration of hand with a disappearing $100 dollar bill.

Paris-based global private equity firm Ardian is acquiring a 50% stake in MXT Holdings, a Mexico-based telecommunications infrastructure provider. 

Why it's the BFD: The deal will help MXT complete an asset swap with Telefónica for around 200 towers and 1,800 km of metro fiber, as well as further M&A, Tim writes.

Details: Ardian will become an equal partner with MXT's other owner, Mexico Infrastructure Partners (MIP).

Antoine Delaprée, MXT's founder and CEO, will continue to head the company.

No additional financial details were disclosed.

What's next: The transaction is expected to close in the second half of this year. 

What they're saying: "The Mexican telecommunications sector offers notable consolidation opportunities. Coupled with a growing middle class, increasing mobile penetration, and a standout management team, MXT is poised for meaningful expansion opportunities," Michael Obhof, senior managing director of infrastructure at Ardian, said in the release announcing the deal.

Ardian acquires 50% of Mexico's MXT Holdings

2. The BFD: MXT's new co-owner

Illustration of a cell phone tower sending out dollar sign signals

The New York Times-owned word game Wordle has partnered with DoorDash on a new ad experience.

Why it matters: About 18 months after acquiring the game, the Times is looking to make more money directly from it — not just serve as a reason for people to subscribe, Kerry writes.

Details: Video ads for DoorDash are running in the mobile web version of Wordle for people who are not subscribed to Games. It appears after someone goes to the mobile site and selects to play. 

This is the first time an ad has appeared on the mobile version of Wordle, a Times spokesperson tells Axios. The company started running ads on the desktop version last year. 

DoorDash's campaign also includes allowing the Wordle of the day to be used as a discount code for its subscription product DashPass from today through Aug. 16. 

Of note: "Wordle usage peaked in March of last year but has remained strong. ... Despite some players' fears that it would, the NYT hasn't ruined Wordle, according to player stats," Axios Gaming author Stephen Totilo wrote this past March from the Game Developers Conference in San Francisco.

Wordle debuts ads on mobile with DoorDash

3. Wordle debuts new ads

Image of a hand holding an iPhone with the DoorDash ad running on the NYTimes.com's Wordle site that features Jason Biggs

Actor Jason Biggs is featured in the DoorDash ad. Photo: Kerry Flynn/Axios

• Inflection AI, a Palo Alto, Calif.-based developer of a personal chatbot called Pi, raised $1.3b at a reported $4b valuation from Nvidia and insiders Microsoft, Reid Hoffman, Bill Gates and Eric Schmidt. https://axios.link/3NZFui6

• Anzu, an Israeli in-game advertising startup, raised $48m in Series B funding. Emmis Corp. led and was joined by PayPal Ventures, Evolution, Simon Equity Partners and Bandai Namco Entertainment 021 Fund. https://axios.link/46ty5Pq

• Voice.ai, a real-time voice editing startup, raised $6m in funding led by Mucker Capital and M13. https://axios.link/3XxkcvH

• Moloco, a Redwood City, California-based ad tech firm, secured new investors in Fidelity Management & Research Company and EDBI through a secondary stock transaction that included Series A investor Korea Investment Partners. The deal boosts Moloco's valuation to more than $2b, up from $1.5b in 2021. It's raised $200m in total. https://axios.link/3JFY4JN

• Vivendi entered into exclusive negotiations with Figaro Group to sell its stake in Gala. The European Commission has required the French media company to sell the magazine if it wants to acquire Lagardère Group. https://axios.link/3CZCiNb

• Alibaba is exploring strategic options for its video entertainment assets, including streamers Youku and Tudou, per Bloomberg, https://axios.link/3NXb68i

• Better Collective acquired Playmaker HQ, a sports and entertainment media platform, for a package of up to $54m, including a $15m upfront payment. https://axios.link/4370yI0

• Tiny acquired HappyFunCorp, a New York-based app design company, for $30m. https://axios.link/436t3FD

• Mercuri (formerly known as GMG Ventures), a British media tech-focused VC firm, raised £50m for its second fund. https://axios.link/3rjNnWL

4. Deal flow

• ESPN on-air talent layoffs: Around 20 high-profile sports commentators including Max Kellerman, Keyshawn Johnson, Jeff Van Gundy, Jalen Rose and LaPhonso Ellis were cut. https://axios.link/3O0bHWG

• Karen Horne, a diversity, equity and inclusion executive at Warner Bros. Discovery, was laid off. https://axios.link/3r6ylnc

• Joanna Abeyie is stepping down as head of creative diversity at the BBC to return to her consultancy business, Blue Moon. https://axios.link/3JEIn5l

• Jeanell English is leaving as EVP of impact and inclusion at the Academy of Motion Pictures Arts and Sciences. https://axios.link/3r8Rtkt

• Stephanie Azam left as head of content at Disney+ Canada. https://axios.link/43cCFP6

• Niantic Labs is laying off 230 employees, about 25% of its workforce, as the AR game developer refocuses on Pokémon Go. https://axios.link/3XGHI9p

• Melanie Tomanov joined Frankfurt Kurnit Klein & Selz as a partner in its Entertainment Group, based in LA. Her clients have included "The Simpsons" creator Matt Groening, United Plankton Pictures and Legendary Entertainment. https://axios.link/46CXC8K

5. Movin' on up (or out)

🧑‍⚖️ Truth Social-tied SPAC says it has tentative SEC settlement (Axios)

"The SEC's probe has centered around whether DWAC executives held merger talks with Truth Social's parent company before the SPAC's IPO in 2021. ... Under the tentative settlement, DWAC would pay an $18 million penalty and revise some of its regulatory filings," Kia Kokalitcheva writes.

📚 Goodreads was the future of book reviews. Then Amazon bought it. (Washington Post)

"In Amazon's more than 20-year history, the company has made dozens of acquisitions, and it is not unusual for it to try to cheaply acquire properties in markets that it wants to dominate, only to let them languish," Caroline O'Donovan writes. 

📺 Netflix to revamp advertising strategy to lure brands and boost revenues (FT)

"Netflix is also seeking to build out its gaming business to include advertising, noted another ad executive. Others added that they expected Apple to follow Netflix and introduce advertising alongside its shows and products," Daniel Thomas reports. 

6. Channel surfing

Illustration of a pair of sunglasses with lenses that look like tv screens.

Ed Sheeran set a new record for single-show attendance at Gillette Stadium, where Kerry and her friend Harrison were part of the more than 71,000-person crowd. 

💭 Kerry's thought bubble: A sweet part about the concert was it didn't break the bank. Unlike Taylor Swift and many other artists, Sheeran chooses not to use dynamic pricing. Instead, tickets are sold and resold at face value. 

I bought GA floor tickets, meaning we were spitting distance from the rotating stage. If only every show could be as affordable as it is enjoyable.

🎶 1 fun thing: Ed Sheeran at Gillette

Harrison Smith and Kerry Flynn. Photo: Harrison Smith

😲 Situational awareness: Meta's Twitter competitor Threads is expected to launch tomorrow. It'll be tied to Instagram but a separate app, Ina Fried writes.

@tim_bays: "The Diplomat" on Netflix. Wife and I finally started watching this over the long weekend. 

@kerrymflynn: "Bluey" on Disney Junior. Watched a lot of this cute Australian dog while I was on bereavement leave and spending time with my nieces. 

✏️ Thanks to George Moriarty for editing and Katie Lewis for copy editing this newsletter.

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July 05, 2023

1 big thing: MediaMath bankruptcy