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What the Rocket Fuel IPO Means for Adtech

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Michael Brown

October 05, 2021
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Last month, Rocket Fuel (FUEL), a provider of artificial-intelligence software for optimizing digital advertising, raised $116m in its IPO, kicking off what we believe will be a big boom for the adtech market. While other adtech companies have successfully entered the public markets in the past, Rocket Fuel’s IPO comes on the heels of a scorching hot enterprise software IPO market and it’s entrance has the potential to spur additional adtech IPOs in coming months. With companies like AppNexus rumored to be approaching the IPO horizon, we could be seeing what is the beginning of the adtech boom.




Rocket Fuel’s IPO was notable for its massive success. The company’s shares jumped more than 90% in their first day, and while the company’s market cap has slipped a bit since, its value has hovered around $2b. That values the company at nearly 20x 2012 revenue, which is impressive given the company is still losing money.


While that valuation isn’t a gigantic IPO, we actually view this as an additional indicator of the market’s strength. Rocket Fuel is just five years old and we’ve seen countless examples of big name IPOs that have been stuck at the altar for years before finally taking the IPO plunge. Five years from founding to exit is an impressive run which is markedly shorter than the 7-9 year industry median window that most data sources suggest. With just over $100m in revenue and several other major adtech companies rumored to be at or near that mark as well, Rocket Fuel is opening the door for several other adtech players to test the market.


While the success of adtech IPOs is a great signal for the maturation of the sector, it’s even more promising for those who have lived and died by the industry in New York City. NYC has been the hub point for adtech, hosting many of the top players who could shortly follow Rocket Fuel. While the investors and entrepreneurs behind these companies have seen several successful M&A exits, IPOs tend to generate the returns and media hoopla that lead industry pundits to qualify the ecosystem as a success. While Rocket Fuel isn’t a NYC-based company, if others in adtech industry follow their lead, we could see a massive shift in Silicon Alley.