Ad tech company OpenX is meeting with rival businesses because it wants to be acquired

Ad tech company OpenX is looking to be acquired and has met with potential buyers both within the ad tech sector and in the marketing cloud space, people familiar with the discussions told Business Insider.

OpenX is an online advertising marketplace - known as an exchange - that has raised $75.5 million in funding and claims to be profitable, on $100 million net revenue in 2014.

It competes with the other big exchanges, including market-leader DoubleClick from Google and the Facebook Exchange. It also competes with supply-side platforms that enable publishers to sell their ads "programmatically" through automated software such as PubMatic, The Rubicon Project, and AppNexus.

But now, eight years after it was founded, the talk of the ad tech community is that OpenX no longer wants to be independent and is seeking to be acquired by a larger player. Several sources within the ad tech community - including those with direct knowledge of the conversations - told Business Insider they knew about the meetings and that OpenX was up for sale.

OpenX chief communications officer Deborah Roth confirmed "strategic discussions" had taken place.

She told Business Insider: "We're having a great year, growing strongly in all dimensions. We remain focused on and excited about building a large, independent programmatic business. As is the case with many high-performing companies, we look for opportunities to add to our capabilities and we have strategic discussions with a range of companies."

"How many exchanges does one require?"

OpenX has long been rumored to be planning to go public, but ad tech companies have shied away from IPOs in recent months, following the recent poor performance of ad tech companies on the public markets. On average, ad tech stocks plunged 35% over the course of Q3, according to investment bank LUMA Partners.

Instead, ad tech company founders have been looking for exits via acquisition. There were 18 ad tech M&A deals in Q3, including AOL's $248 million acquisition of Millennial Media and News Corp acquiring Unruly for £114 million ($172 million.)

Meanwhile, a number of independent ad tech companies including PubMatic, Collective, and Turn have all announced layoffs in the past month. Collective CEO Joe Apprendi admitted the challenges of the current market to AdExchanger: "All signs point towards continued compression within this sector."

OpenX and its management team are well-respected within the ad tech industry and they are credited, alongside Rubicon Project, for leading the clean-up of ad fraud and bots within the programmatic advertising system. It sits at the top of the Pixalate global seller trust index, which ranks measures programmatic advertising firms for the quality of inventory on their system.

However, one ad tech investor who asked not be named told Business Insider: "The challenge is: what is your value proposition if you're an exchange? There's a number of other larger exchanges run by Google and other companies that do similar things. How many exchanges does one require?"

Another ad tech CEO who asked not to be named told Business Insider: "When I ask myself who are some of the smartest guys in the SSP/exchange business, I'd shortlist maybe Google, OpenX, and Index Exchange. But [OpenX] seem to have drifted sideways, as with PubMatic. Looking for a buyer may be more about the fact that the company started [in 2007], and that's a long time horizon for most VCs and entrepreneurs."