The DSP Beeswax, founded in 2014 by ad tech gadfly Ari Paparo, is off the market.
Comcast’s video ad tech company FreeWheel said Thursday it will acquire the “bidder-as-a-service” for undisclosed terms.
Over the last couple of years, FreeWheel has increased its buy-side capabilities, building out a more advanced exchange, hosting upfronts and integrating with third-party demand-side platforms. And now FreeWheel has its own.
FreeWheel GM Dave Clark said the company pulled the trigger on Beeswax in particular because it’s “a customizable demand-side buying service that’s designed to leave control in the hands of the users.”
Beeswax is a little different from other DSPs because of that customizability – users can install their own algorithms – and because it charges a subscription fee rather than taking a percentage of media, which is a particular benefit for ad buyers paying CTV’s high CPMs.
“Many companies in ad tech have structured the sales of their technology as SaaS, although it’s often not bought that way – but in Beeswax’s case, their technology is bought and sold on a SaaS business model, and that makes a big difference,” said Terry Kawaja, founder and CEO of LUMA Partners, which advised on the deal.
Incorporating the actual buying platform technology fills a hole in FreeWheel’s buy-side stack and lets it serve marketers who want to participate more fully in the CTV and video buying process. Both Clark and Beeswax CEO Ari Paparo insisted however that FreeWheel will continue to work freely and openly with the other DSPs it has relationships with.
The deal is expected to close in January 2021, and because Beeswax and FreeWheel already work together, Clark doesn’t anticipate a heavy technological integration. But Clark declined to reveal what branding Beeswax will take, or what Paparo’s exact role will be, other than joining the FreeWheel leadership team. (Paparo: “I’m taking over the Comcast Twitter account.”)
But will Beeswax eventually have unique access to inventory owned by sister company NBCU, or on NBCU’s new streaming service Peacock? After all, the partnership between FreeWheel and NBCU has strengthened in recent years – for instance, FreeWheel technology decides how to traffic ads on all of NBCU’s properties, both digital and linear.
Clark wouldn’t commit one way or the other, though he did emphasize that FreeWheel does not intend to take a walled garden approach, nor does FreeWheel own its own inventory. (It’s worth noting though that NBCU does, and could make a separate decision.)
Beeswax isn’t the most obvious choice for a TV-centric DSP. While it has always been able to buy online video, it only last year raised a $15 million series B to start making inroads into the CTV space.
But Paparo noted that Beeswax has seen “enormous growth in CTV over the last 18 months,” and the company has built out technology to make CTV buying easier. For instance, it has a solution that lets CTV buyers distribute budget, so they can be sophisticated when prioritizing private market place deals over purchases on the open web.
Paparo said a “large proportion” of the media spend Beeswax sees is devoted to CTV, but declined to be more specific.
Other DSPs, such as The Trade Desk, MediaMath and dataxu had been more vocal touting their CTV buying capabilities. But Roku bought dataxu for $150 million in October 2019, and The Trade Desk and MediaMath are likely unaffordable. The Trade Desk is tearing up the public markets with a market cap of $44 billion and MediaMath has raised $608 million according to Crunchbase, compared to Beeswax which has raised $28 million.
