AppNexus Waits for the Right IPO Moment

The U.S. display advertising market is estimated to be worth $14.98 billion this year, compared with $12.33 billion a year ago. eMarketer estimates that this market will be worth $20.69 billion in 2014 and $17.67 billion in 2013.

AppNexus’s Financials

New York–based AppNexus is among the more powerful, open, and customizable advertising technology platform for online advertising. The company was founded in 2007 by Brian O’Kelley and Mike Nolet, both alumni of Right Media. AppNexus provides technology, data and analytics to organizations so that they can buy and sell online display-advertising on a real-time basis. AppNexus is known for having set standards for excellence in ad technology. Its solutions help big companies with online advertising by providing tools that enable advanced yield management control, optimize algorithms, and deliver patented brand and safety monitoring.  Customers include Microsoft and AT&T.

Financials for AppNexus are not known. The company has seen its revenues grow 150% over the year for the past two years. A few analysts claim that AppNexus saw revenues of $17 million in 2011 and was aiming for revenues of $40-$50 million this year. AppNexus’s management claims that both these estimates are lower than its real numbers. The company recorded its first profitable month last August. It has grown significantly over the past few years and reportedly sees more than 27 billion ad impressions run through its websites daily. Further, it has expanded from a two-employee set-up in 2007 to nearly 290 employees. It has also grown its geographical footprint and now has offices in San Francisco, Seattle, London, Paris, and Tel Aviv.

The company has received $65 million in venture funding from investors that include First Round Capital, Khosla Ventures, Marc Andreessen, Ron Conway, Ben Horowitz, Coriolis Ventures, Kodiak Venture Partners, Venrock, and Microsoft.

AppNexus’s Market Growth
AppNexus is looking to grow operations internationally and is evaluating several European players for potential acquisition targets, partners, and customers to grow its presence on the Continent. Last year, it tied up with Hi-Media SA (HIM), a Paris-based electronic payments company, to launch its own ad exchange. Recently, it announced an agreement with Stailamedia, the largest independent online marketer in Switzerland, to work together within the Swiss market. Stailamedia will use AppNexus’s technology for the automated sale of advertising space. This will be the first time ever that real-time bidding systems will be used on the publisher’s side in the Swiss advertising market.

AppNexus recently acquired fantasy sports startup Fantuition for an undisclosed amount. Fantuition let users on social media networks compete with each other on topics they were passionate about. Fantuition’s purchase by AppNexus was not for its product, but for its team of talent.

AppNexus was looking to go public by the end of this year. However, the economic conditions and the poor reception of several technology IPOs may have delayed that target date. AppNexus estimates that it is worth $800 million-$1 billion. However, the market thinks otherwise. Analysts believe that AppNexus may be worth $500 million for now.