Connected TV ad serving platform Innovid is joining a growing list of ad tech companies going public this year, especially amid a surge in interest in CTV.
Innovid hopes to tap into bullish market sentiment around ad tech companies, led by the market success of established players like The Trade Desk, Magnite and PubMatic. Other companies that have coming to market include DoubleVerify, Viant, Pubmatic, and Zeta Global, with Integral Ad Science set to debut later this month.
Innovid says its market debut will make the company more transparent and stable to brands and advertisers looking for long-term CTV stability. “It’s very important for them to keep seeing us as a company that’s extremely strong, stable, and they can count on for the next five, 10 or 15 years for delivering and measuring their entire CTV budgets,” says Zvika Netter, co-founder and CEO of Innovid.
The company is positioning itself as a middle ground for CTV advertising that is able to serve players like The Trade Desk and Google. Innovid says its most recent growth came from a spike in CTV users caused by stay-at-home orders under the pandemic, and claims the trend is unlikely to reverse even as people move outside of the home. “Once people connect [a CTV device] to the internet, they become an audience,” says Netter. “From that point on, they consume more and more ad supported content through that medium. That’s a process that’s not going backwards.”
The company will make its market debut through a special purpose acquisition company, or SPAC, which works by having investors set up a shell company with the sole purpose of “acquiring” a company looking to come to market. As part of the maneuver, Innovid will merge with ION Acquisition Corp, a publicly traded SPAC with a $253 million trust. The move gives Innovid an implied pro forma valuation of about $1.3 billion.
Coming to market through a SPAC gained prominence after it was used by companies like Virgin Galactic and DraftKings. “For us, it was the speed of the process,” says Netter. “We can make it happen in a few months and be out there.” Innovid is expected to go public in the fourth quarter of 2021 when the acquisition closes.
Ad tech’s rush to go public reflects a cash-flush market buoyed by low interest rates and eager to invest after seeing the success of established players, says Brian Wieser, global president of business intelligence at GroupM. “Trade Desk has become a benchmark for valuation, providing some confidence among investors about the sector,” he says. “That makes the sector itself an attractive one for new issuance of capital.”
Having more ad tech companies go public can also make the industry less complicated, Wieser says. “In a sector difficult to understand, with so many companies going public someone could piece together a far more comprehensive understanding of the industry than possible.” It also fuels competitiveness, allowing companies to compare—and sell—on the strength of their metrics.