UK-based digital marketing agency Brainlabs has successfully raised its valuation to $320 million in its latest fundraising round. This substantial increase in valuation highlights the continued resilience of data-driven advertising, even in the face of a broader slowdown in the market. While traditional large advertising agencies have experienced a decline in advertising spend as clients, particularly those in the technology sector, look to cut costs, more focused digital marketing rivals like Brainlabs have managed to thrive.
With over two-thirds of the market now shifted towards digital advertising across online platforms and connected TVs, Brainlabs has secured investment from US private equity firm Falfurrias Capital Partners. The funding will be used to expand the agency’s operations geographically, establishing offices in markets across Europe, Asia Pacific, and Latin America. By doing so, Brainlabs aims to challenge the dominance of the large advertising groups in these regions.
The latest fundraising round values Brainlabs at eight times more than its valuation four years ago. Founder Daniel Gilbert stated that although the company had the option to sell itself to one of the large agencies, it instead chose to leverage its strengths in the fastest-growing parts of the market to directly compete with them. To finance its rapid expansion, Brainlabs opted for capital from private equity rather than pursuing a public listing.
Brainlabs plays a crucial role in producing and buying advertising for clients such as Estée Lauder, Adidas, and WeTransfer using real-time online auctions. By utilizing advances in artificial intelligence (AI), the agency can target advertising to consumers with greater precision, resulting in more personalized advertising at scale. Additionally, the impact of such digital media is easier to measure, further enhancing the value it brings to clients.
According to WPP-owned GroupM, digital advertising is projected to account for more than two-thirds of the estimated $598.5 billion in global revenues this year. Although the growth rate is slowing due to market maturity, revenues are still anticipated to increase over 8% in 2021.
Brainlabs aims to continue its expansion through future acquisitions of companies and technologies that will support its growth. Since its inception in 2012, the agency has already completed eight acquisitions and currently employs over 850 people.
Source: The Financial Times