Denver-based video ad platform SpotXchange announced today it is selling a 65 percent stake to European entertainment network RTL Group for $144 million. The two companies also agreed on an earn-out deal depending on SpotXchange’s future performance.
This deal is an interesting move for SpotXchange because “instead of selling the company to a major U.S. technology company, and becoming one feature in a giant ad tech stack, we’ve taken a route that will allow us to operate independently while becoming a core part of RTL’s global business and strategy,” SpotXchange CEO Mike Shehan said in a statement.
“This deal is yet another example of the broadcast, content and digital worlds converging but it is very unique in that it represents the first time a major broadcaster has invested in programmatic video advertising,” Shehan said. “SpotXchange has never been afraid to take the road less traveled, and challenge the norms in the ad tech industry.”
RTL is a huge worldwide entity with over 10,000 employees and $8 billion in annual revenues, interests in 54 TV channels and 27 radio stations and with a content production arm that distributes over 20,000 hours of content in over 150 countries. No doubt that SpotXchange’s publishers like The Atlantic and Hearst will benefit from this deal, which is expected to close in August, especially since it avoids any conflict of interest with either the buy side or supply side that might have happened with a sale to another tech company.
SpotXchange was founded in 2007 by Shehan and CFO Steve Swoboda and now has grown to an 180-person team (with plans to hire another 70 in the next year). It now has over 1 billion auctions per day, with ads delivered to over 335 million people per day. This year in particular has been good to SpotXchange: its revenue increased 145 percent YoY in Q1 and SpotXchange saw significant growth in mobile, with over 3.1 billion mobile video impression opportunities in Q1.
Today's deal isn't just a good sign SpotXchange, but also for the Colorado tech community and its other fast-growing ad tech companies like Trueffect and Altitude Digital who are playing in the same space. “This is tremendous validation for video advertising, a sector that we have long believed would be the top driver of growth for the advertising industry at large,” Shehan said.