DoubleVerify goes public at $4.2 billion valuation

Adtech measurement and verification company DoubleVerify debuted on the public markets on Wednesday morning (April 21) at a US$4.2 billion valuation.

The company, which evaluates media placements for fraud, brand safety and ad viewability, raised $340 million in its public debut and priced on the New York Stock Exchange at $27 per share, offering 13.3 million shares of common stock.

The stock will list under the ticker “DV” on the New York Stock Exchange.

Despite adtech stocks not performing well in the past (aside from The Trade Desk), DoubleVerify believes it is ready to go public because it is profitable with 30% EBITDA margins, which puts it “in the realm of high-growth software businesses,” said CEO Mark Zagorski.

“We're different from traditional adtech stocks,” he added. “We work with advertisers, but we don't sell media. We don't take a take rate off a transaction. We don't fight over what's left after Google and Facebook snap it up.”

Instead, the analytics company operates on a “transaction SaaS” model in which it gets paid every time someone runs an analysis on a media impression, Zagorski explained. “We lock in a fixed per-transaction fee like a software company, but we also can grow with volume.”

Last year, DoubleVerify’s revenue grew 34% to $244 million. The company measured roughly 3.2 trillion media transactions. It’s top 75 customers have stayed with the company for over five years, making its product “a sticky utility,” Zagorski said.

Brand safety and fraud are still growing concerns for digital advertisers, and they are extending to new media including connected TV and digital audio as more transactions are done programmatically. DoubleVerify will use the IPO funding to expand its solution into these new media formats while deepening its operations in global markets.

The company currently operates in 15 markets across North America, Europe, Asia and Latin America.

“It seemed timely for us to ensure we are meeting the needs of our clients in every sector they're in and continue to grow on a global basis,” Zagorski said.

While brand safety solutions are necessary for advertisers to operate in safe environments online, they got some pushback last year as brands began blocking keywords associated with Covid-19, Black Lives Matter and other global crises. This led, in some cases, to advertisers demonetising legitimate news sources covering important issues.

DoubleVerify has evolved its tools over time to be more nuanced in analysing sentiment associated with articles and keywords, acquiring contextual analytics company Leiki 2019.

“It's about funding legitimate content and keeping dollars away from hate speech, or fake news, or white supremacist content,” Zagorski said. “To get there you can't use a meat cleaver. You have to use a scalpel.”

DoubleVerify is the latest in a group of ad tech companies to go public this year, including PubMatic, Viant and AppLovin.