Video ad tech company TubeMogul has just raised $US82.9 million in a secondary market offering.
Its stock is currently trading down around 6% on the news. However, that’s fairly normal after a large financing.
The offering was for around 5.3 million shares sold at $US15.75 a share, more than double its $US7 IPO price less than a year ago.
TubeMogul CEO Brett Wilson told Business Insider: “It’s hard to look at this as anything but a big win for us and our shareholders.”
Wilson says the idea was to bolster the balance sheet, and it puts out a signal to the market about the orderly transition of its VC-funded shares back to the public market.
TubeMogul’s raise comes at an interesting time for the ad tech sector in general. Executives in the sector and venture capitalists told The Wall Street Journal’s CMO Today that VC funding is “running dry” for ad tech companies. And the overall value of public ad tech company stocks dropped more than 12% in the first quarter, according to tech investment bank LUMA Partners.
And many of those public ad tech companies have notched up multi-million dollar losses, as has TubeMogul: In its most recent quarter, it reported a net loss of $US7.1 million. And its cash assets were down 21% year on year to $US37 million.
But Wilson says this isn’t the reason behind the financing. He told us that revenue for 2014 doubled from last year (in the last quarter it was up 55% to $US14.3 million) and that the company’s cash is exactly where it should be: “We’re not a company that is bleeding cash and needed to raise. We are exactly the opposite. We are doing better than expected and we think we can build out the ultimate brand advertising platform.”
He says the key to raising financing is showing growth, differentiation, and proving the business model works.
In December the company launched a programmatic ad buying program that gives marketers the opportunity to target audiences not just by age and gender like normal TV buys, but hundreds of other internet-like data points
“We have market-leading growth, our focus on programmatic TV and brand advertising is clearly differentiated, we’ve shown gross profit for the last three years and we’ve posted faster growth [than we have spent] on sales and marketing,” Wilson added.
Of this financing, $US55 million will be returned back to the company, while $US27.9 million will be returned to stockholders. The software company granted the underwriters of the offering a 30-day option to buy up to 789,486 additional shares of common stock.
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