Despite sector-specific uncertainties and broader macroeconomic pressures weighing on the public markets, the Digital Media and Marketing Technology ecosystem remained resilient, extending its momentum from 2024 into Q1 2025. Total deal count reached 116—a +26% YoY increase—including several high-profile scaled transactions. Deal activity across both Ad Tech and MarTech rose +33% YoY, with 16 scaled deals (>$100mm EV) across those two sub-sectors.
Public markets capitulated after recording strong gains to end 2024. The LUMA.A and LUMA.M indices each declined -17% in Q1 2025, underperforming the Nasdaq (down -8%). Note that these indices traded down an additional 10%+ through the first week of Q2 following the announcement of broad-based US tariffs. Private financing activity remained strong in Q1, driven predominantly by investments in technology and AI sectors (including OpenAI’s $40bn capital raise). Global funding totaled $112 billion in Q1 2025 marking the strongest quarter for investment since Q2 2022.
Looking Ahead:
Operators and investors in the digital ecosystem will continue navigating macro uncertainties as the market awaits clarity on US tariff policy and potential retaliatory measures. These developments could materially impact global supply chains and, downstream, ad spend budgets. Amid this uncertainty, we expect a continued emphasis on capital efficient growth and exploration of investments into strategic capabilities and growth channels.
M&A Activity Highlights
- Total Q1 2025 deal volume rose +26% YoY; flat vs. Q4 2024
- Ad Tech M&A: up +33% YoY, down -20% QoQ
- MarTech M&A: up +33% YoY, up +6% QoQ
- Scaled deals (>$100mm): 23 transactions in Q1, a +21% YoY increase. MarTech led the sub-sectors (10), followed by Digital Content (7), and Ad Tech (6).
- Notable Transactions:
- T-Mobile’s $600mm acquisition of Vistar Media
- H.I.G. Capital’s $1bn acquisition of Kantar Media
- Braze’s $325mm acquisition of OfferFit
Public Markets & LUMA Indices Highlights (Market Data as of 3/31/2025)
- LUMA.A: Down -17% in Q1 2025 and traded below the Nasdaq (-8%). 16 of 22 companies in Ad Tech declined -10% or more in Q1 2025. Digital Turbine (+61%), Illumin (+14%), Nexxen (+4%), and Verve (+1%) posted gains. AppLovin, which rose 700%+ in 2024, fell -18% in Q1 2025 and ended the quarter down -50% from its February peak.
- LUMA.M: Also down -17%, with Comscore (+18%) the only positive gainer in the category
- The Ad Tech cohort delivered mixed results in Q4 earnings. Seven companies missed net revenue expectations, including The Trade Desk marking its first-ever miss as a public company. TTD shares traded down more than -30% the day after reporting.
Download the full report for detailed insights on Ad Tech, MarTech, and Digital Content, including the following:
- Quarterly deal activity across Ad Tech, MarTech, and Digital Content.
- Public market trends and earnings highlights in Ad Tech and MarTech.
- Public valuation and operational benchmarking across Ad Tech and MarTech.
- Private financing trends and investor activity across the sectors.