Matomy serves today's "connected consumer", one who is active on various platforms, including smartphone apps, video streaming sites and social media, says chief executive Ofer Druker. He believes the group stands out in a crowded market because it offers advertisers a single point of contact for access to eight different media channels, including mobile, online video, search and social media.
Matomy expects its IPO to deliver a free float of at least 35 per cent. The group intends to raise about $100m (£60m) to spend on accelerating its growth, as well as increasing its stake in Team Internet, a search-services business, from 20 per cent to 70 per cent, for about $19m. Matomy also plans to pay off $7m in loans, and to buy out its Mexican subsidiary.
The group has over 1,500 customers, including American Express (NYSE: AXP), Experian (EXPN) and Zynga (Nasdaq: ZNGA), serves over 85 countries and uses more than 16,000 digital media sources. It has also been profitable since 2008 - it reported adjusted cash profits of $13m on sales of $194m last year, up from $9m and $120m, respectively, in 2012. Moreover, its sales have grown at a compounded annual rate of 35 per cent over the past three years, while adjusted cash profits grew 19 per cent on that measure. The business has also established a reliable client base, with two-thirds of its revenues coming from customers it has worked with for more than two years.
Matomy's rapid growth may well continue, as it competes in a growing market. Global digital advertising spending grew from $89bn in 2012 to $156bn in 2016, according to ZenithOptimedia, a research company. It also predicts that mobile, social media and video ad spending will grow 54, 30 and 23 per cent, respectively, over the same period.
The UK is a good example of the trend towards digital and mobile. National mobile ad spending is set to overtake newspaper spending for the first time this year, surging 90 per cent to £2.3bn, says research provider eMarketer, or 15 per cent of the country's total ad spending.
Of course, Matomy will face fierce competition for ad dollars. Google (GOOG), which we recently placed on a buy tip, earned almost $14bn in ad revenues last quarter. It has also been innovating in the space - it recently launched 'enhanced campaigns' that enable marketers to buy cross-platform ads for desktop and mobile users, and product-listing ads, which allow retailers to place shopping links directly into Google's searches. Meanwhile, ad revenues at Facebook (FB) grew 76 per cent year on year last quarter, with 53 per cent of sales from mobile devices such as iPads and smartphones.
