Irvine’s Viant Technology Inc., an advertising software company led by a 39-year-old chief executive and perhaps best known for its purchase of social network website Myspace.com a decade ago, is growing up.
With plans in place to go public, the 22-year-old firm is positioning itself to grab a larger share of the booming 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.
Viant on Jan. 15 filed a registration statement with Securities and Exchange Commission to go public via an initial public offering, and set a placeholder value of $150 million as the amount it aims to raise.
It’s the third traditional IPO announced by an Orange County company already this year, following that of Foothill Ranch’s mortgage lender loanDepot Inc. and Irvine interior design company Interior Logic Group.
Another firm long based in Lake Forest, home healthcare provider Apria Inc., also has plans to go public but will do so with a base in Indianapolis (see story, page 3).
The IPO plans would mark the latest corporate change for Viant, which has seen several different ownership structures over the years.
The company’s sibling founders—Chief Executive Tim Vanderhook, Chief Operating Officer Chris Vanderhook, and Senior Vice President Russ Vanderhook—regained control of the firm in late 2019.
Last week’s IPO paperwork indicates the brothers paid $25 million to buy back a 60% stake in the company, along with another $3.5 million in professional service fees.
“We already owned 40%. To buy out the other shareholder and continue and charter our own direct course exactly as we had was really exciting. We think we got a great deal,” Tim Vanderhook told the Business Journal at the time of the 2019 deal.
Chris Vanderhook, 42, also told the Business Journal at the time of that deal that the company’s near-term plans were to go public.
The company wasn’t able to comment last week on the IPO news, due to quiet period restrictions.
Machines Buying Ads
The company sees huge opportunities in the digital ad space, quoting 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.
“Programmatic advertising is the automated buying and selling of online advertising,” said monthly newsletter Acuity Insights. “This automation makes transactions efficient and more effective, streamlining the process and consolidating your digital advertising efforts in one technology platform.”
Or as online trade magazine Digiday summed things up a few years ago: “It’s using machines to buy ads, basically.”
Viant says its software “is designed to make our customers’ lives easier by enabling marketers and their advertising agencies to plan, buy and measure advertising campaigns in a highly automated fashion.”
Net Income Up
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 new way of marketing is a more profitable one than traditional methods, the company says in its IPO filing.
Programmatic advertising “is rapidly taking market share from traditional ad sales channels, which require more staffing, offer less transparency and involve higher costs to buyers,” Viant said.
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.
It continued: “Through our technology, a marketer can easily buy ads on desktop, mobile, connected TV, linear TV, streaming audio and digital billboards.”
Viant sees huge possibilities for its technology.
“We believe that over the long term, our total addressable market is the total global advertising market which, according to eMarketer, is forecasted to grow from $614 billion in 2020 to $846 billion in 2024,” Viant said.
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.
“We believe the advertising industry is still in the early stages of a shift to programmatic advertising,” Viant said.
The number of shares to be offered and the price range for the proposed $150 million IPO have not yet been determined.
Viant intends to list its Class A common stock on the Nasdaq Global Market under the ticker symbol “DSP,” a nod to its Adelphic platform.
BofA Securities and UBS Investment Bank are acting as the main underwriters for the proposed offering.
Viant’s legal team includes the Irvine office of Gibson, Dunn & Crutcher LLP.
Specific uses of the IPO’s proceeds haven’t been disclosed, but Viant suggested acquisitions are a possibility.
The company listed just $23.5 million in debt as of Sept. 30, consisting of a $17 million revolving line of credit and a loan from the coronavirus-inspired Paycheck Protection Program.
Expect some money to go towards a ramp-up in hiring for the company, whose ranks are approaching 300.
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.
“We have experienced and may continue to experience rapid expansion of our employee ranks,” Viant said in the IPO filing. It was advertising on its website for 38 open positions in various locations as of Jan. 17.
They’ve got another notable firm as corporate neighbors: Palmer Luckey’s defense and border security tech company Anduril Industries occupies the back half of the 2722 Michelson facility that holds Viant’s 47,000-square-foot headquarters.
The company, 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,” the company said, although it didn’t’ specify revenues it generates from the social network.
Time Inc. acquired a 60% stake in Viant in 2016 and then sold it to Des Moines, Iowa-based Meredith Corp. in 2018. In fall 2019, the Vanderhooks regained control of the firm from Meredith Corp.