Public markets have rarely been kind to advertising technology, or adtech, companies. Millennial Media—once the poster child for hot tech companies going public—found this out the hard way. When it went public in 2012, the US-based adtech firm’s share price doubled doubled Biz Journals How Millennial Media went from a hot IPO to an AOL acquisition Read more on the first day of trading to almost $28. Three years later, with its share price languishing at $1.34, it was acquired by Verizon-owned AOL at $1.75 a share.
France-based Criteo, another publicly-listed adtech company, fared marginally better. Its share price started at $31 in 2013, went steadily upward for a good four years to $56, and then fell off a cliff. A Criteo share is now worth under $12.
“If you see the public markets in the US, the most unfavoured child would be adtech. Mining would be second,” says Anuj Khanna Sohum, founder and CEO of Gurugram-headquartered adtech firm Affle India Pvt Ltd. Despite precedent, Sohum chose to take Affle, a subsidiary of Singapore-headquartered Affle Holdings, public. Sohum spoke to The Ken last year in July, just before the company went public in August 2019, and then again on 26 September 2020.
When Affle listed on India’s bourses on 8 August 2019, its share price was Rs 929.9 ($12.5). On 14 September 2020, its share price touched an all-time high of Rs 3,053 ($41.3), giving the company a market cap of almost a billion dollars. Since its debut, Affle’s stock has appreciated 239.81%, drastically outperforming the benchmark BSE Sensex, which rose just 1.75% in the same period.
Adtech isn’t an easy space to tread. There’s a lot of money to be made—the digital advertising market in India in 2019 was
Rs 13,638 crore
Rs 13,638 crore
Dentsu Aegis Network
Digital advertising in India report
($1.86 billion), according to Dentsu Aegis Network, a digital marketing company. That opportunity, however, is dominated by Google and Facebook, who have a combined market share of almost
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Google and Facebook prey on digital advertising for content by news producers
. The rest of the market is contested by hundreds of smaller players, with Affle the largest among them.
Affle has no direct competitor offering the same range and breadth of services at a similar scale, according to Omkar Tanksale, equity research analyst at brokerage firm Axis Securities.