Public ad tech companies are not disappearing because their businesses are failing. According to investment bankers at the ATS London conference this week, the bigger problem is size: many are too small to attract the index funds and mutual funds that support a meaningful public valuation.
The small-cap trap
Josh Wepman, managing director of technology investment banking at Houlihan Lokey, said most public ad tech firms sit at market caps that are too small for real institutional volume. “It’s hard to be a $7 billion company, right?” Wepman said. “You’re looking at trying to attract investment dollars from different indices or mutual funds, they often don’t. It’s hard to put real volume into a business that has an $800 million market cap.”
Wepman’s basket of publicly traded ad tech stocks has underperformed the broader tech sector, with multiples continuing to decline through 2025 into 2026. Deal activity has picked up to around $14 billion so far this year, but the total is spread across fewer deals, so the average transaction is getting bigger.
The slide with no pattern
Nick Macshane, founder and senior managing director at Progress Partners, added a sharper visual. His firm tracks every public ad tech stock from January 1 to now, and the results look like a Rorschach test. Some names are down 60%; others are up 60%. The companies that were down 60% last year are up 60% this year, and vice versa.
“There’s no rhyme or reason,” Macshane said. The pattern often leads people to conclude that many of these businesses should not be public at all.
What marketers should watch
For marketing and media teams, the public market shift is not just a Wall Street story. A consolidating ad tech sector can change vendor roadmaps, data access and pricing power. Key signals to monitor include:
- Which ad tech partners are likely to be acquired or taken private, and how that may affect contracts and service.
- How companies such as The Trade Desk respond to slowing growth and rising competition.
- Where enterprise buyers including Salesforce, Adobe, ServiceNow and Workday are circling, alongside newer entrants Databricks, Snowflake and OpenAI.
- Whether take-private deals for Criteo, DoubleVerify, LiveRamp and Integral Ad Science reset expectations for private ad tech valuations.
The Trade Desk’s cautionary tale
The Trade Desk illustrates how difficult the small-cap turnaround can be. Its stock has fallen more than 80% since mid-2025 as growth slowed and competition intensified, and it is now set to be dropped from the S&P 500 later this month. Wepman believes a recovery is “doable,” but said “it’s not going to be easy.”
Still, the take-private wave shows that buyers see value. Acquirers are looking at ad tech businesses trading at fractions of their five-year highs, and both traditional enterprise software names and newer data and AI companies are evaluating opportunities.
Source: Digiday
