DataXu CEO Confirms He Will File For An IPO
DataXu is one of the larger independent online ad buyers, or "demand-side platforms" as they're called in the business. It had revenues of $87 million in 2012 and will do "well over" $100 million in 2013, Baker says. The five-year-old company, which is one of Facebook's ad exchange partners, currently has 235 employees. It has taken more than $60 million in venture capital funding, but Baker declines to disclose what valuation DataXu's backers have put on the company.
DataXu is one of the bigger players in the "programmatic," or real-time bidding, online ad world, in which buying software makes snap decisions on behalf of clients as opposed to humans placing orders and hoping for the best. Its clients include Ford, AmEx, and Lexus, plus numerous ad agencies.
A DataXu IPO is not a complete surprise. It has long been rumored to be exploring a public sale of stock.
"We're a company that hopes to go public in the next year or two," Baker says. "We're fast-growing."
"It's a liquidity path that I as a CEO have more control over than alternatives, which include paying dividends to shareholders out of profits or having a large cap M&A."
But Baker isn't filing the paperwork just yet: "It's all about timing," he says.
Overall, Wall Street has not looked kindly on adtech IPOs. Their stocks have flopped after launch. However, two recent adtech IPOs - Criteo and Rocket Fuel - were regarded as resounding successes. Rubicon has also confirmed it will go public. And Flurry recently said it would explore an IPO, too. Baker thinks the market is sorting the wheat from the chaff: "Some of these companies that had a tough run, they were pushed out with the wrong business model and basis, I wouldn't want to be public on that basis. It's difficult to get into mobile when you've been single-streamed onto desktop," Baker says.
"I'm not saying next month. We're taking the time as a private company to get our model aligned and focused. I have to make quarterly numbers now anyhow," he says.