The Irvine-based digital advertising software company (Nasdaq: DSP) made its public trading debut Feb. 10. Viant was priced at $25 a share, raced upward after opening at $44 and was trading at $64 toward the end of last week. The strong start gave the company founded by Vanderhook brothers Tim, Chris and Russ a market cap of about $3.8 billion.
There were plenty of bumps along the way for Viant, best known nationally for its purchase of social networking site Myspace a decade ago.
“Myself and my brothers started this company out of our parents’ house in Yorba Linda. It hasn’t been a straight line to get here, I’ll tell you that,” said Chief Operating Officer Chris Vanderhook, speaking to the Business Journal on the company’s first day of trading.
“It’s been 21 years of not just us, but our team, of perseverance against all odds. To be able to get here today is pretty tremendous.”
2019 Buyback
Viant’s twists and turns include selling a majority stake in the company to Time Inc. in 2016 before buying it back in 2019 from a different company, in what regulatory filings indicate was a $25 million deal.
All the while the Vanderhooks have had to compete against larger companies in the booming digital advertising space such as Google and Facebook.
The firm is positioning itself to grab a larger share of the digital advertising market, helping advertising agencies and marketers get placement for their customers across a variety of channels, including desktops, mobile phones, connected TVs, streaming audio and digital billboards.
Local IPOs
The Vanderhook brothers rang the Nasdaq opening bell virtually from Irvine, the latest in a line of area companies to go public the past year, both via traditional IPOs and other means.
Foothill Ranch’s mortgage lender loanDepot Inc. (Nasdaq: LDI) went public earlier this month by the traditional IPO route, and now counts a market value around $8 billion (see page 3).
Indie Semiconductor in Aliso Viejo, meanwhile, plans to go public via the increasingly popular SPAC—special purpose acquisitions company—path for a quicker trip to public trading. It’s one of several OC firms that have used the SPAC reverse-merger route to go public in the past year.
Another firm long based in Lake Forest, home healthcare provider Apria Inc., also went public this month, and now counts a market value of nearly $800 million (Nasdaq: APR), but did so with a base in Indianapolis.
Opportunity Ahead
Chris Vanderhook, Viant’s 42-year-old COO, sees huge opportunities for his company.
“We’re in a large and fast-growing market,” Vanderhook said as Viant’s shares soared. “It still has a ton of runway in front of us.”
He explained the company’s business—known as programmatic advertising—by saying it helps marketers and their agencies buy ads anywhere electronically.
Viant has cited a research firm’s estimate that the U.S. programmatic advertising market is expected to grow from $65 billion in 2018 to $140 billion in 2022.
“Think of us as the E-Trade for ads,” he said. E-Trade, part of Morgan Stanley, provides an electronic platform for trading assets.
As he explains it:
“Marketers want to use software to be able to easily buy an ad, let’s say on a desktop or a mobile phone, video ad, on connected television, a streaming audio ad, modify a billboard in Times Square or even a local NBC broadcast on linear television. Marketers are buying ads in all these channels but they need a piece of software to help them electronically buy it.”
$200 Billion Market
“That electronic buying represents about 40% of the total U.S. ad market, which is a $200 billion market and growing 11% a year. Programmatic’s growing twice that rate,” Chris said.
Viant’s leaders emphasized the company’s local roots; its current headquarters are at the intersection of Jamboree Road and Michelson Drive, in the same building as Palmer Luckey’s Anduril Industries Inc.
“We are staying in this building on Michelson,” the COO said. “We’re focused on staying here in Orange County in Irvine for our headquarters.”
That sentiment is echoed by his brother, Chief Executive Tim Vanderhook, who just turned 40 on Valentine’s Day.
“We love Orange County. We would never leave Orange County,” Tim told the Business Journal. “We’ve had incredible mentors, all of whom run businesses locally. Without them we wouldn’t be able to be here today.”
He also recalled the long slog to get to Wall Street.
“We continued to grind it out through good times, bad times and now to be able to go public and hopefully with a great future,” Tim said.
He continued: “Those were just dreams, and our parents gave us really great advice when we were young that you could have anything you want in life. You just have to work really, really hard. It took us working really, really hard. What they didn’t tell us is that you have to do it for a really, really long time.”
The third brother that’s part of the company, Russ Vanderhook, also a Viant co-founder and, according to his LinkedIn page, a senior vice president of the company.
‘Don’t Quit’
“There’s 300 team members here that have the identical ‘don’t quit’ mentality,” Tim said.
Chris and Tim each hold a 14% stake in the public company, regulatory records indicate. Their stakes were each worth about $520 million as of last week.
Specific uses of the IPO’s proceeds haven’t been disclosed, but Viant said its long-term strategy includes “investing in growth through acquisitions.”
Expect some money to go towards a ramp-up in hiring for the company, which counted 282 employees in the U.S. as of Sept. 30.
The company was advertising for 38 open positions as of Feb. 15, ranging from senior accountant to sales engineer and senior account executive.
“We’ve just come and gotten here against all odds, against the biggest competitors, Google, Facebook. We know all the big giants that are out there in digital advertising,” Tim said.
“And for the little company from Orange County to go from unknown to now publicly listed, it really is a fantastic feeling.”
Market Share
Viant reported $108.8 million in revenue for the nine months ended Sept. 30, down 4% from the same period a year earlier. Yet net income increased to $7.8 million in the first nine months of last year, up from $4.5 million during the same period in 2019.
The company beefed up its software offerings in 2017 with the purchase of Adelphic, a so-called “demand side platform” which is “used by marketers and their advertising agencies to centralize the planning, buying and measurement of their advertising media across most channels,” the company said.
The company’s DSP stock ticker is based on the demand side platform moniker.
Viant’s registration statement notes that by using its technology, “a marketer can easily buy ads on desktop, mobile, connected TV, linear TV, streaming audio and digital billboards.”
“We believe that over the long term, our total addressable market is the total global advertising market which, according to eMarketer, is forecast to grow from $614 billion in 2020 to $846 billion in 2024,” according to Viant.
Viant’s customers are advertising buyers, including large advertising holding companies, independent advertising agencies, mid-market advertising service organizations, as well as marketers that rely on the company’s self-service software platform for their programmatic ad buying needs.
“The historical way of sending emails, hiring reams of people to try and call all the local TV stations to buy adds, that’s just really inefficient,” Tim said.
New York, LA
In addition to the Irvine headquarters, the company’s website says its other locations are in New York, Los Angeles, Chicago, Dallas, suburban Detroit, Atlanta, Minneapolis, Boston and Denver.
Viant, founded in 1999, was perhaps best known nationally for its 2011 purchase of social network Myspace, a $35 million transaction backed in part by singer and actor Justin Timberlake.
The MySpace deal still “provides certain data assets and intellectual property that we may leverage to continue to offer innovative products and services to our clients,” Viant said, although it didn’t specify revenues it generates from the social network.
Brothers Tim, Chris and Russ Vanderhook of Viant Technology Inc. aren’t the only brother act in Orange County tech.
Siblings Chad Steelberg and Ryan Steelberg founded Costa Mesa-based artificial intelligence company Veritone Inc. (Nasdaq: VERI) in 2014, with Chad the chief executive and Ryan the chief operating officer.
The company boasted a market cap around $1.3 billion as of last week. Its share price is up nearly 66% since the start of the year.
Veritone is the creator of the aiWARE operating system for artificial intelligence. The system helps analyze unstructured public and private audio, video and text data for clients in a variety of markets, including media, entertainment, legal, compliance, energy and government to provide actional intelligence in a searchable database.
There is another notable sibling tech enterprise in Orange County: 5G wireless equipment innovator Movandi Corp., founded and run by Maryam Rofougaran and her brother Reza Rofougaran.
