At the turn of the year, everything was looking rosy for mobile marketing and ad-tech firm Fiksu: It was preparing for an IPO and planned to double its global workforce to about 500 staff.
Now the Boston-based company, which specialises in mobile app advertising and marketing, appears to have hit a bump in the road. As first reported by the Boston Business Journal, Fiksu has scrapped its IPO plans, is cutting 10% of its workforce, and its chief financial officer Ken Goldman has suddenly left the company.
Fiksu provided Business Insider with this statement from its CEO and founder Micah Adler:
“Fiksu is a market leader in the area of programmatic media buying, and we have been increasingly automating all aspects of our business and platform. As a result, we’ve been able to increase the effectiveness of the campaigns we run, but also create efficiencies across our organisation. To take full advantage of those efficiencies, we’ve undergone a reorganization and, as a result, eliminated some roles. 2014 was Fiksu’s strongest year to date, as we achieved more than $US100M in revenue, and we expect 2015 to be even stronger.
Regarding the IPO, the ad tech sector is currently not popular with public company investors. While this may change rapidly, and clearly ad tech will be an ongoing cornerstone of the advertising ecosystem, Fiksu does not have plans to IPO at this time.”
Fiksu confirmed that “approximately” 10% of its 260 roles will be affected. However, a spokesman told us that the company is still “selectively hiring” across sales, product, and engineering where needed.
As for Goldman: He was hired to specifically work on the IPO. As that’s no longer an option, it made sense for the two to part ways.
Fiksu was founded in 2008, and has raised $US16.7 million in funding to date, according to CrunchBase.
The news that Fiksu is backing away from an IPO once again highlights the coolness from investors around the ad-tech market at the moment. Ad-tech stocks continued to slide in the first quarter of this year, The Wall Street Journal’s CMO Today reported, with Rocket Fuel (-43%), TubeMogul (-39%), and Tremor Video (-17%) taking the biggest batterings. Overall, LUMA Partners, which advises digital media firms, says the total value of ad tech stocks fell 12% since the turn of the year.
Fiksu’s layoffs are also indicative of a wider trend towards automation across the advertising industry, which is affecting hundreds of roles worldwide. AOL, Yahoo, and Microsoft, for example, have all made big layoffs recently as they refocus their advertising offerings around programmatic advertising, which allows marketers and agencies to buy advertising space through automated means, so there’s less of a need for human sellers.
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