The home Joe Zawadzki constructed will likely be foreclosed.
AdExchanger has realized that the demand-side platform, which raised $600 million since 2007 and had a peak valuation of greater than $1 billion, will file for chapter.
Emails went out to MediaMath staffers and companions on Friday morning to say the corporate will shut down operations within the coming months. Entry to MediaMath’s platform will not be out there as of June 30.
Viant and MGI-owned Verve Group had been lately every in a course of to amass MediaMath, however potential offers foundered in each circumstances. MGI was in discussions as lately as this week.
Regardless of its storied historical past – MediaMath is thought for having launched one of many the first-ever DSPs – the corporate has been stricken by monetary points.
If the chapter is a Chapter 7, which seems doubtless, the corporate’s belongings will likely be liquidated. Whereas Chapter 11 permits for a reorganization by which a debtor can nonetheless function its enterprise, the aim of a Chapter 7 is to promote an organization’s belongings to pay its obligations.
After paying remaining wages and salaries, the principle excellent lenders will likely be paid again – on this case, Goldman Sachs – adopted by collectors, if there’s something left from the sale of belongings.
Nearly all of MediaMath’s greater than 300 workers will doubtless lose their jobs, with only a small variety of folks remaining to deal with primary features through the chapter proceedings.
Tough numbers
Though early MediaMath shareholders anticipated an enormous exit – whether or not that be within the type of going public or the corporate getting purchased for large bucks – the corporate by no means fairly closed the deal.
MediaMath raised greater than $600 million because it was based in 2007 and boasted a roster of three,500 model and company clients, however was compelled to recapitalize final 12 months with Searchlight Capital.
The startup offered a controlling stake to Searchlight in trade for an settlement to speculate as much as $150 million by way of a mix of contemporary capital and debt refinancing.
Because of the Searchlight transaction, MediaMath’s shareholders, early buyers and co-founders, together with Zawadzki, misplaced all of their fairness within the firm, a story already deftly instructed by Lara O’Reilly at Insider.
MediaMath had additionally taken a $150 million credit score facility from Goldman Sachs in 2017, which it was nonetheless within the means of paying again.
These monetary machinations – which have been going for not less than six years – had been largely a results of MediaMath lacking its M&A window and never discovering a viable acquirer.
LUMA was reportedly purchasing MediaMath in 2021, and MediaMath employed funding financial institution Houlihan Lokey in April to discover strategic choices. Over time, IBM, Magnite, Amazon, Tremor and IPONWEB had been all rumored to be potential acquirers.
Nothing got here of it.
Starting of the top
Regardless of its woes, or maybe extra so on account of them, former Sizmek and DG government Neil Nguyen was introduced in early final 12 months to interchange Zawadzki as CEO of MediaMath.
A press launch asserting the transition pointed to Nguyen’s previous expertise “on the entrance traces managing firms by way of strategic and expertise transformation and strategic transactions.”
The Searchlight recapitalization happened just a few months later, and Nguyen’s remit was to drive monetary progress and assist MediaMath discover its exit technique.
However it seems that Searchlight’s timer ran out, and the agency was not keen to finance MediaMath, which was bancrupt.
Searchlight started a gross sales course of for MediaMath and, as a result of MediaMath nonetheless owes some cash to Goldman Sachs, the financial institution had a lien on the corporate and was straight concerned in negotiations.
When it’s over
It’s doable, however not assured, that somebody (or a number of someones) will purchase items of MediaMath at public sale.
Within the meantime, MediaMath’s closure creates a vacuum that different DSPs, together with The Commerce Desk, Viant and Google, will rapidly rush to fill.
Macy’s, for instance, used MediaMath as its main DSP, however the retailer additionally has a relationship with the Commerce Desk. That’s a tempting blue-chip account.
The MediaMath account vultures are a part of the circle of life.
However as one advert tech government put it to AdExchanger on situation of anonymity, “different DSPs will profit, however what occurred to MediaMath isn’t good for advert tech and it’s a tragic means for the corporate to finish.”
T.S. Eliot had it proper: “That is the best way the world ends, not with a bang however with a whimper.”
The next is the e-mail that was despatched to companions –
I’m reaching out right this moment to share an vital replace on our enterprise.
As you could have already heard within the information, MediaMath has been exploring strategic various choices for the previous a number of months. This included securing extra financing and/or merger or sale of the corporate. Sadly, as a result of altering and unsure financial surroundings, and the fast enhance in rates of interest, we had been unable to safe this deliberate capital infusion. This led to negotiations with a number of potential patrons as we pursued a sale transaction.
Regardless of our greatest efforts, the deal we anticipated to be consummated this week fell by way of yesterday. We’re left with the lack to proceed working the Firm in a traditional course of enterprise. Accordingly, we’re required to wind down our enterprise instantly.
As we speak will likely be most workers final day.
As of June 30, entry to the platform will not be out there. We’re working diligently to reduce enterprise impacts and remorse any inconveniences brought on by this announcement. We intend to work with you to handle your issues and any excellent obligations as wanted.
We worth our relationship with you and had hoped to work with you for a few years to return. As a crew, we’re deeply disenchanted we can’t proceed to accomplice with you and your online business.
There will likely be a small group serving to wind down the corporate, please attain out to [email protected] with any questions.
Story up to date at 6:25 p.m. EST to incorporate the e-mail to companions.
