End of an Era: Jumptap Bought by Millennial Media for $200M+
Call them the Big Five, and please fill in the blank: Third Screen Media, Enpocket, Quattro Wireless, Where, …?
Those four previous Boston-area mobile-ad companies were acquired in the past several years by AOL, Nokia, Apple, and PayPal/eBay, respectively. Together they represent a consolidation of the “old guard,” if such a thing can exist in a field as young as mobile advertising.
The Jumptap acquisition will be mostly in stock. The company’s shareholders will get 24.6 million shares of Millennial Media, which amounts to about 22.5 percent of the larger company. That stock is currently valued at a little over $200 million.
It’s a big deal for the Boston tech ecosystem, for sure. But Jumptap raised $121.5 million since its founding in 2004 (originally working on mobile search), and it has been one of the area’s biggest technology bets for years. So this doesn’t look like a blockbuster exit by any means—more like a decent return with some wait-and-see. The company’s investors include General Catalyst, Redpoint Ventures, and Summerhill Venture Partners.
As for what will happen in the industry, the deal “will position us to be one of the big winners” in mobile advertising, said Millennial Media CEO Paul Palmieri, in a conference call this afternoon. He added that the merged company, which will incorporate Jumptap’s technologies into its platform, will have market share of the mobile-ad sector that rivals Google’s. (Recall that Google bought AdMob for $750 million in stock in 2009.)
Jumptap’s leadership team is joining Millennial in various capacities. CEO George Bell will become a board member and vice chairman (see his blog post here). Frank Weishaupt (Jumptap’s COO), Bob Hammond (CTO), and Adam Soroka (chief product officer) will have unspecified management roles.
On the conference call, Bell said he had just spoken to Jumptap’s employees, and that they were “truly excited” about the acquisition. The goal now is “building the leading mobile advertising platform worldwide,” he said. Bell added that the culture fit between the two companies is strong. “We share these mobile-first roots,” he said.
Jumptap had about 170 employees as of a year ago; it expanded from Cambridge, MA, into a new office in Boston last fall. No details yet on the fate of that office post-acquisition, but any changes are probably a few months away.
Although they are close competitors, it sounds like Millennial and Jumptap do different things well. Millennial is strong in brand advertising, while Jumptap has grown in performance advertising, where buyers pay for measurable results. In recent years, Jumptap has become known for its real-time bidding technology for mobile ad placements and for its audience targeting across different screens. The company also touts its intellectual property, which consists of 55 patents issued and another 50-plus pending.
Bell and his team will bring valuable strategic thinking to Millennial Media as it tries to compete with the Googles and Apples of the world. Where the topsy-turvy mobile advertising industry goes from there is anyone’s guess.
Meanwhile, a new guard has emerged among Boston-area mobile ad companies. Their names may already be familiar: Adelphic Mobile, Celtra, Nexage, SessionM. Time to catch up with them in more depth.