Following its busiest quarter on record at the start of the year, merger and acquisition activity in the martech and adtech markets dropped slightly in Q2, according to the latest figures from Results International.
In total there were 217 deals in the first half of the year – 115 in Q1 and 102 in Q2 – but despite the slight slow-down, the sector remains a hub of investor interest.
In particular, there has been an increase of acquisitions by private equity and PE-backed portfolio companies in the second quarter.
This grew across both martech and adtech, accounting for over 20% of the martech deals and 15% of adtech, described by Results International as a “significant rise”, particularly for adtech.
Results International said this suggests private equity firms are becoming more comfortable with businesses in this sector.
A renewed investor appetite in adtech is also apparent in the improved performance of adtech firms on the public markets over the past year.
Stocks for Taptica have more than quadrupled in value since July 2016, while The Trade Desk and Crossrider have also seen growth in excess of 100%.
Local search marketing and content management firm Yext went to IPO in April and continues to trade above its IPO valuation at a strong revenue multiple.
There have been a number of $100m+ adtech deals in the first half of the year, including Oracle’s acquisition of Moat for $850m, Snap Inc. buying Placed, a location-based marketing and analytics platform for a $200m, Twitter’s acquisition of MoPub and Facebook’s investment in LiveRail.
“Adtech, martech and the broader tech universe are recovering strongly from a relatively tough few quarters,” said Julie Langley, partner at Results International.
“Market trends are very positive, the number of martech deals is growing and if combined adtech and martech M&A rates continue into the second half of 2017, this could be a record-breaking year.
“While the market remains tough for undifferentiated propositions, we anticipate that interest in companies underpinned by AI and machine learning will bring a fresh wave of funding to both the adtech and martech segments.”
The US remains the most active market for adtech and martech, accounting for over 50% of deals completed globally in the first half, but its lead is slowing, Results International said.
