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Sector Report: Internet & Digital Media Q3 2019

EXECUTIVE SUMMARY
Q3 2019 Internet & Digital Media Wrap-Up

  • Internet & Digital Media continues to be a highly active category, with ~$34.5Bn in M&A volume (including the $20.9Bn Viacom-CBS merger) and ~$12.9Bn in financing volume during Q3 ’19
    • 15 M&A transactions in Q3 ‘19 as varied as: Vista / Acquia (CMS); Prudential / Assurance (Insuretech); Vox / New York Magazine; Hasbro / eONE
    • 688 financings across all stages — from seed to LBO – in Q3 ’19 consistent with the similar volume in Q3 ’18
  • Financial sponsor-backed M&A and financing activity remains healthy in the category as firms look to deploy capital and back innovators and market leaders, especially leading digital brands
    • Vista Equity continues its strong pace of investment with its purchase of Acquia, an open digital experience company, in its third billion dollar deal in the last 12 months
    • Growth equity investment continued in Q3 including Sequoia’s investments in Stripe and Thumbtack and TCG’s investment in Food52
  • Q3 public capital markets activity saw 22 VC-backed IPOs, dominated by technology-based D2C companies including Peleton and SmileDirectClub; the number of VC-backed U.S. unicorns remains at a record high
  • From a trading perspective, Marketplace companies lead the public company pack, trading at 7.1x EV / ’19E Revenue and 21.3x EV/ ’19E EBITDA on average
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