Videology, FastPay and Tennenbaum Capital agree $80m credit facility
Videology has secured an $80m credit facility in a deal with FastPay and Tennenbaum Capital Partners that will see the adtech outfit use said funds to advance its programmatic TV advertising offering in the market.
The topic of funding in the adtech sector has been under much scrutiny over the past two years, with many industry observers claiming that purveyors of such wares are now finding venture capital (which had been abundant circa five years ago) difficult to come by.
In parallel to this, both adtech and martech companies have increasingly found it difficult to access credit, despite global media spend continuing to rise, according to Fast Pay.
A company spokesperson told The Drum that the latest announcement was the largest such arrangement it had ever participated in since its inception in 2009. Although the ongoing ‘credit crunch’ plus VC drought experienced by such outfits meant it has signed several similar deals with sizable adtech and martech outfits in recent months.
These dual trends have in-turn prompted a number of low-value exits, or ‘fire sales’, in recent years. The last 12 months have also been characterized by private companies taking ownership of adtech outfits that had previously listed publicly, with Sizmek’s proposed takeover of Rocket Fuel (for a fraction of its record high evaluation) serving as one such example.
In a press release announcing the tie-up Videology chief executive Scott Ferber said the three-way agreement showed that FastPay and Tennenbaum “showed a deep understanding of the evolving media ecosystem,” and that “the facility provides the additional liquidity we need to expand our business further and faster.”
FastPay specializes in providing credit to various constituent players in the media industry with a specific specialism in adtech companies, who are often the final link in the payment chain given the current industry norms when it comes to payment terms.
Those seeking credit facilities from the company can upload copies of their unpaid invoices to FastPay's system, and once approved the company can release credit into the market (see video at top of page).
Addressable TV advertising spend is set to top $1.5bn in the US this year, and grow further still to over $2.1bn in 2018, albeit this will account for under 3% of the total TV ad market in 2018, which indeed indicates that Videology is operating within one of the industry’s most sectors.
However, with a recent FastPay study indicating that the average payment terms have increased markedly in recent years as brands (and subsequently their agency partners) delay how liquidity is passed through the supply chain this has introduced new stress factors to the market.