Tapad / Telenor Acquisition

Tapad was recently acquired by Telenor for $360M. Who is Tapad? Who is Telenor? Why would it buy Tapad?

 

At its heart, Tapad is a cross-device data platform. They tried to help marketers match the same user between different devices. They monetized this in a number of ways, but primarily by charging people to use this data to buy media. The company was founded in 2010, and in March 2011 had a "legendary" seed round, in which nearly every ad tech angel investor participated (https://www.crunchbase.com/organization/tapad/investors). It's noteworthy that Tapad was largely conservative with their fundraising, only needing $36M or so.

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Their primary competitors are Drawbridge, Blue Cava - and some DSPs that have strong proprietary plays, including RocketFuel, MediaMath and Adelphic, as well as Google and Facebook. The base of Tapad's business is collecting a "deterministic" or "true" set of data. A canonical example might be partnering with the NY Times to get login data for users across different devices, and map that user with access on the desktop and mobile device. From this deterministic base, Tapad extends out using probabilistic tactics to expand reach while maintaining a high confidence. In this sense, the core of their business was in the data business, notwithstanding their active presence in the media market. Given that, and given the strategies of various acquirers, one might have expected Oracle, Adobe, or maybe Salesforce to be the most likely buyers. Facebook wouldn't necessarily need their data, but might be interested in taking a potentially competitive data set off the market.

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So Telenor. I personally hadn't heard of them before. But they're a larger Norwegian telecom. The CEO of Tapad is, I believe, Norwegian (he's definitely Scandinavian). “With the acquisition of Tapad, Telenor Group is taking a position within the rapidly growing market for advertising technology, and securing important competence within digital marketing and analytics. I believe significant value can be created from applying marketing technology to improve the digital capabilities of our core telecom business. This will improve our understanding of customer behaviour, and supports building a platform for other business areas,’’ says Sigve Brekke, Chief Executive Officer of Telenor Group, in a statement.

There appear to be a couple trends in ad tech. Some of the older, traditional acquirers are losing their mojo a bit (Yahoo, Twitter, AOL) - but a whole new crop of company are joining the space with a renewed vigor. Specifically, telecoms are expanding into the media space - first with a spate of traditional media acquisitions over the past 10+ years, and now increasingly into the advertising technology space. This includes Verizon, Comcast, Telenor, Singtel, among others. As an aside, we're also seeing traditional media companies enter the space - including News Corp (buying Unruly), Bertelsmann (SpotX), Sky (DataXu investment), among others.

This contradicts some of the public market trends, and generally speaks to the idea that simply building a good, profitable company without raising too much money is a sound business strategy.