This compares to the Safeguard release for Q3 2010 where Safeguardwhere Safeguard said it had "deployed $6.7 million in MediaMath since July 2009 and has a 17% primary ownership position," If you look at MediaMath's SEC filing in March which announced a new round of investment of $9 million, it would appear that Safeguard was the sole investor in the latest round given the update in the Safeguard Q1 2011 release. Interesting to note that $9 million got Safeguard 5% more of the company in 2011, whereas Safeguard's previous investment of $6.7 million got them 17% of MediaMath.
Doing the back-of-the-envelope math, $9 million for a 5% increase in Safeguard's stake indicates a MediaMath valuation of $180 million during the latest investment round.
Another interesting trend here is the "inside round" as MediaMath chose to go with existing investors rather than reach out to another new or strategic investor. AppNexus (in 2009) and Invite Media - to name a few - also each took inside rounds at various times during their start-up "lives". This used to be seen as a bad sign in that companies were perceived to not get valuations they wanted. But times change - Invite successfully exited courtesy of Google. AppNexus is establishing itself as a digital ads infrastructure leader with the help of a $50 million investment from Microsoft.
It feels like "the inside round" is serving a few beneficial purposes in the ad tech start-up world at the least: insiders get to increase their stake and not risk dilution in a follow-on round; investors invest in something they know; and startups get to stay with existing investors who they know and trust.
By John Ebbert