#7: TripleLift Hits Home Run!
Does TripleLift make it into our Quo Vadis Unicorn Club? What multiple on ad flows did Vista Equity Partners pay for TripleLift?
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Is TripleLift in the Unicorn Club?
Making it into the Unicorn Club means a programmatic player needs to touch $1 billion or more in ad budget. Does TripleLift make it in?
The short answer: No. How do we know? TripleLift told us so:
“TripleLift has now crossed $1 billion in lifetime ad spend. A billion dollars have now run through our pipes. More impressively, over half of that total has transacted this year alone. It took us nine years to get to a billion but, with half of it coming in just 12 months, we are growing…fast. That’s an average rate of increase in ad spend over 70% every year of our existence.”
Will TripleLift make it to the Unicorn Club? If so, when?
Like puzzle pieces, TripleLift’s management team provided just enough clues for Quo Vadis to model out what its ad budget flows might look like using diffusion analysis (aka S-curve).
Let’s start where TripleLift stands today with $500 million in ad budget flows.
We used a logistics model to map out what TripleLift’s past might have looked like, which is likely curve-shaped just like every other company’s growth since the beginning of time.
Quo Vadis estimates that Year 1 ad flows in 2012 were around $3M.
If you add up each year from 2012 through 2020, our model will sum to $1 billion in cumulative spending (see table below for details).
Maximum Potential for TripleLift
The most difficult parameter to set in a growth model (or any adoption curve model) is the maximum potential. In this case, we set TripleLift’s max at $1.5 billion.
Why $1.5 billion? Because the inverse of a nominal growth curve (dollar values) is percentage growth rate decay. As time goes by, finding more growth gets increasingly difficult eventually reaching a terminal value in the low single digits. We think TripleLift will hit terminal growth rates around 2027 with total ad flows around $1.5 billion.
Along the way, our model predicts TripleLift will join our Unicorn Club somewhere between 2022 and 2023.
What multiple on ad flows did Vista Equity Partners pay for TripleLift?
With $500M in 2020 ad flows and a $1.4 billion valuation, Vista Equity Partners paid just 2.8x ad flows. That’s a nice discount from the current comp set trade.
Vista Equity Partners is a seasoned private equity firm. They clearly understand how to price the intrinsic value of a target asset and know how to buy assets like TripleLift for less in order to lock in value today.
With an average ad flow multiple of 6.7x across TripleLift’s closest peers, it looks like TripleLift’s management team was eager to sell, so Vista got a nice a deal. As long as TripleLift makes it into the Unicorn Club, everything will be groovy... sounds like a great earn-out trigger to us!
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Topics:
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