2023 was a challenging year for dealmaking, as global deal value dropped below $3tn for the first time since 2013. In our coverage areas, 2023 deal volume was down~10% from 2022, as declining Ad Tech and Digital Content deal activity offset stable MarTech deal activity. That said, the year finished off strong as Q4 saw the most scaled transactions (>$100mm) in six quarters. The public markets bounced back from the tech sell-off in 2022, as evidenced by the LUMA Indices and relevant benchmarks S&P 500 and Nasdaq 100 which all had double-digit gains for the year. This strong performance was fueled by resilient underlying business results and a shift toward profitability throughout the ecosystem. On the venture front, Generative AI attracted record levels of capital in 2023 and was a bright spot in an otherwise sluggish venture market. There continues to be an abundance of dry powder in the private markets that investors are actively looking to deploy into high-quality supply.
Despite the headwinds in 2023, market participants in the Digital Media & Marketing Technology sectors are cautiously optimistic heading into 2024 due to a confluence of factors: strong digital ad spend growth (+14%), recent GDP growth, stabilizing interest rates, and improving investor sentiment.
M&A Activity Highlights
- While 2023 deal volume was down from 2022, there was a late uptick in scaled deals > $100mm, with 19 scaled transactions (MarTech 8, DigitalContent 8, Ad Tech 3).
- Looking ahead to 2024, buyers and sellers will be keeping an eye on stabilizing interest rates and valuation levels, as price expectations continue to converge and strategic buyers look for new capabilities, while financial buyers look to move an abundance of dry powder off the sidelines.
Public Markets & LUMA Indices Highlights
- In line with the broader market, the LUMA.A and LUMA.M cohorts performed well in 2023, growing (+40%) and (+17%) respectively, as the cohorts look to continue the momentum from a strong Q4 into the new year.
- From an earnings perspective, Q3 2023 saw most Ad Tech and MarTech names beat revenue and EBITDA consensus estimates. As in recent quarters, trading performance following earnings appeared to be heavily influenced by upward or downward revisions for full year guidance.
Download the full report to get all the data on Ad Tech, MarTech, and Digital Content, including the following:
- Quarterly deal activity by sector
- Public market trends and the latest earnings details for Ad Tech and MarTech
- Public valuation and operational benchmarking across Ad Tech and MarTech
- Highlighted private financing activity across the sectors