PubMatic Inc (NASDAQ: PUBM), a sell-side advertising platform that runs real-time programmatic ad transactions, continued to rally 15.53% on 16th December, 2020 and rose over 1.2% on 17th December, 2020 (as of 10:32 am GMT-5; Source: Google finance).
The company had launched its initial public offering Wednesday. PubMatic stock was priced at $20 per share, but opened at $25.12, and at one point rose more than 65% to $33.16 Wednesday after debuting on the Nasdaq under the symbol “PUBM.” The company had sought to raise roughly $115 million. The shares ended the day by being up more than 47%, giving the company a market valuation over $1.4 billion. The company is 14-year-old, which allows publishers and app developers to sell space to advertisers across media, including display or video ads on desktop, mobile app, mobile web, or connected TV.
The company has reported $93 million in revenue in the first nine months of the year, which represents a 16% increase from the same period last year. PUBM has raised a little more than $76 Mn in funding. It is currently backed by the likes of Nexus India (25.7% stake) and Helion Venture Partners (18.8% stake). As per the prospectus, PubMatic directly competes with adtech company Magnite, which is valued at $2.1 Bn and generated $140 Mn in revenue in the first nine months of the year. Another major competitor is Google, which also offers supply/sale-side adtech solutions.
Further, the company’s clients comprises of the publishers like Verizon Media Group and News Corp and app makers like Electronic Arts and Zynga. The Verizon relationship is especially important, making up 28% of its revenue in 2019 and 21% of its revenue in the first nine months of 2020. PubMatic competes with divisions of Google along with other supply-side platforms like Magnite (which was formed as a product of a 2020 merger between public ad tech companies Telaria and Rubicon Project). The company also competes with private companies in different markets across the world.
Meanwhile, the company is operating in a lucrative space and seems to be gearing up for the big game in the global arena, going by industry predictions. According to research firm eMarketer, the global digital ad spend was about $325 Bn in 2019 and is projected to grow to $526 Bn by 2024. IT industry lobby Nasscom projects Indian SaaS revenues to be around $3.5 Bn and forecasts it to grow six times by 2025, calling the industry a trillion-dollar opportunity and the next big thing in Indian exports after the IT and ITeS services.