Tag: Safeguard Scientifics

MediaMath looks at strategic alternatives; Safeguard Scientifics still owns 13.3%

Tom Paine

The Wall Street Journal ran a story yesterday that said New York-based online ad-buying marketplace MediaMath is exploring strategic options amid an uptick in its market. MediaMath is one of the few independent DSPs (Demand-Side Platforms) left.

MediaMath was one of Safeguard Scientific’s largest portfolio holdings (and still is). Safeguard invested $15.6 million in MediaMath between 2009 and 2010 and accumulated a 22% stake. When the decision to begin gradually divesting its portfolio was made in 2018, Safeguard completed in July 2018 the sale of 39.1% of its 22% ownership position in MediaMath back to MediaMath for $45.0 million in cash. The repurchase represents the equivalent of an implied cash-on-cash return of 4.5x on Safeguard’s 39.1% ownership position. It reflected a total valuation for MediaMath of $523 million.

MediaMath had the right to repurchase an additional 10.9% of Safeguard’s ownership position on or before the 180 day anniversary of the initial repurchase for $12.5 million in cash. However, that date has long passed and Safeguard still owns a 13.3% stake as of the end of its first quarter 2021.

I couldn’t find a current valuation estimate for MediaMath, but my guess is its next valuation will be significantly higher than the $523 million at which Safeguard sold in 2018. But that’s only a supposition, and MediaMath faced significant risk during the pandemic so I don’t think you can criticize Safeguard much for taking the money when it did. And Safeguard may still receive a good gain when the remaining 13.3% is sold.

 

Ex-Safeguard Scientifics exec caught in middle of AWS /Google Cloud wars (Update: Resolution)

The case of Phillip Moyer moving from AWS to Google Cloud, which I covered earlier https://theregister.co.uk/2019/10/25/amazon_fails_to_stop_exstaffer_working_for_google/… via @theregister

Tom Paine

Phillip Moyer, former SR VP and Managing Director of Safeguard Scientifics, departed Safeguard in 2016 to get more directly into the Cloud industry, joining leader AWS as Managing Director, Americas Financial Services Sales.

Moyer, also a Microsoft veteran and former CEO of two companies, was not hired to just sell slices of server time. Rather, he was developing overarching , value added vertical sales strategies. By the time he resigned in 2019, he had 13 direct reports and managed 100 employees.

In a 2018 interview with the website PYMNTS, Moyer described what his financial services group was trying to accomplish for AWS: “’Today, if you want to launch a financial services product, very, very few (of them) are regional anymore,” he said. Web and mobile channels enable businesses to reach across all kinds of borders, basically amounting to leaving money on the table if firms do not try to win revenue from as many markets as possible.” AWS could give smaller banks the tools needed to compete with larger banks, for instance, in the area of compliance.

But Google Cloud had finally determined that it needed real sales pros out there to compete, and began recruiting heavily. Senior SAP executive Rob Enslin joined as head of customer operations in April. It hired Moyer to head up a similar effort (as at AWS) for healthcare. His last day at AWS was on May 22.

But Moyer had signed one of those tricky non-competes when he joined AWS, designed to keep him away from competitors for 18 months. And AWS sued.

The extent and enforceability of non-competes is generally shrinking. Even though Moyer, who resides in Berwyn according to court filings, lives in Pennsylvania where non-competes are less strenuous, the laws in Washington State which govern Moyer’s contract are tougher.


“Moyer’s role in Google cloud will necessarily involve strategy regarding sales of and improvements for Google’s current or future cloud offerings, and will therefore threaten the disclosure of Amazon’s highly confidential information and breach the Noncompetition Agreement,” AWS asserted in its complaint

These cases, generally, reach some kind of settlement within months, and Mr. Moyer will likely be allowed to go on with his work. Sometimes there are itemized restrictions (ie, can’t talk to certain companies, can’t say certain things) attached.