It looks like ad tech consolidation is in full swing.
The ad tech company Sizmek said Tuesday it had reached an agreement to acquire rival ad tech firm Rocket Fuel, for $US125.5 million.
That price is eye opening, considering that Rocket Fuel was once valued at nearly $US2 billion, according to the Wall Street Journal.
Rocket Fuel has become something of a poster child for the roller coaster ride of ad tech companies in the public markets. As Business Insider’s Jim Edwards noted, the company’s stock was once valued at $US66. Now it’s less than $US3.
When Rocket Fuel went public in 2013, many investors eyes were opened to the fact that its business was less scalable than the average pure tech company — and required a lot of people and spending to operate.
Since then, Rocket Fuel has been hit by allegations of dealing in fraudulent ad inventory and eventually faced leadership changes and layoffs. The company has tried to pivot from a managed service business to a software-as-a-service company (SAAS) which would generate more reliable revenue and could operate with fewer people.
But over time, Rocket Fuel, like every other company in this industry, has had to face the growing reality of the dominance of Google and Facebook.
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