$20m exit doubles valuation of three years ago

Technology investment firm Bailador (ASX: BTI) has received $20 million cash from the 100% sale of its portfolio company Standard Media Index (SMI) announced in March, more than double its valuation of three years ago. 

A further $100,000 return is subject to escrow and final adjustments expected to be determined by August.

SMI has been acquired by Chicago private equity firm GTCR as the second strategic investment for its portfolio company Dreamscape, which it plans to build, through acquisitions, into a leading global marketing technology business.

Dreamscape co-founder Scott Knoll has taken over as chief executive of SMI with former chief executive James Fennessy stepping down. Fennessy is to take on a board role with Dreamscape and will serve as a consultant to SMI.

Knoll said: “SMI’s leading data and ad intelligence products provide clients with real-time information to help drive better strategies around spend, placement and yield optimisation. With the proliferation of media channels and ad types, the insights that SMI can help provide are now an essential driver of media strategy.”

SMI provides rapid analysis of digital marketing spend. Founded by Sue Fennessy and Jane Ratcliffe in Australia in 2009, the company moved headquarters to New York in 2011. Sue Fennessy served as chief executive until 2016 when James Fennessy, formerly chief commercial officer, took over.

Bailador invested in SMI in 2014 as one of its earliest investments. After slow early growth as it built its technology, data infrastructure and relationships with media agencies, SMI’s growth accelerated. Bailador lifted the valuation of its investment in the company 30% to $9.6 million in early 2019.

SMI now tracks over $US250 billion dollars of annual media spend annually.

Managing director and co-head of technology at GTCR, Craig Bondy said: “We see tremendous upside potential in SMI and its advertising software solutions. The company is well-positioned in the marketing and advertising industry with deep relationships with its partners and customers which have served it well. We believe that our investment, alongside the Dreamscape team, will provide the resources to expand SMI’s current product portfolio to address new markets and create fully integrated solutions for its customers.”

Kirkland & Ellis and Clayton Utz acted as legal advisers and LUMA Partners acted as financial advisers to GTCR and Dreamscape. DLA Piper acted as legal adviser and Stifel Nicolaus & Co as financial adviser to SMI.

Disclosure: The writer is an investor in Bailador Technology Investments.