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TubeMogul Files for an IPO

Posted on Tuesday, Jul 15th 2014

According to a report by Magna Global, the worldwide advertising market was estimated to be worth $490 billion in 2013. TV advertising remains the largest ad segment, accounting for $197 billion in spend globally. However, like in other areas, digital video advertising is growing rapidly. The researcher estimates that spending on digital video advertising globally will grow 28% annually over the period 2013 through 2017 to be worth $22.5 billion.

TubeMogul’s Offerings
Emeryville, California-based TubeMogul is among the leading ad-buying platforms that helps advertisers make better informed decisions. They provide an ad inventory aggregating service that simplifies the process of purchasing ad space for digital video advertising. Their self-serve platform Platform Direct integrates various technologies and sources of inventory within a platform, which enables advertisers to deliver sophisticated, scalable digital video advertising campaigns.

Additionally, they also provide analytics capabilities that help brands evaluate the effectiveness of the advertising through metrics such as brand lift and engagement. Their solution essentially uses a cookie on the consumer’s browser to determine video advertising watching statistics such as how long did the viewer watch the ad for, was the ad forwarded, and other metrics. The real-time data available through these metrics helps advertisers optimize spend to the right channels. Besides the self-serve option, TubeMogul also operates Platform Services that allow advertisers to define campaign objectives while TubeMogul’s team executes the advertising on their platform. While TubeMogul’s platform is able to provide ad services to multiple platforms, nearly all of their revenues still come from desktop advertising.

TubeMogul’s Financials
TubeMogul’s ad platform has been used by more than 2,000 brands. Their self-serve platform is catching up fast with the number of customers growing from 25 in 2011 to 208 last year. Overall revenues have grown from $15.7 million in 2011 to $57.2 million in 2013. Platform Direct revenues increased from $2.2 million in 2011 to $19.33 million in 2013 while the Services segment saw revenues grow from $13.5 million to $37.9 million during the same period. Losses have increased from $0.33 per share in 2011 to $0.56 per share last year driven by continuing investments in R&D and Sales and Marketing efforts. Over the same period, adjusted EBITDA losses have also widened from $3.8 million to $5.8 million.

Till date, TubeMogul has been venture funded with $53.2 million in investments received from Trinity Ventures, Foundation Capital, Cross Creek Advisors, SingTel Innov8, Northgate Capital, Knight’s Bridge Capital Partners, Bee Partners, and the NSV. The last round of funding was held in May last year when they raised $10 million at an undisclosed valuation in a round led by SingTel Innov8 to help the company expand their international operations, especially in Asia. Recently, TubeMogul filed their S-1 to list on the NYSE under the ticker TUBE. The company plans to raise $93 million by selling 7.2 million shares at $13 each. The IPO puts them at a valuation of $372 million.

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