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Congratulations to IAS on the IPO Milestone! On a Mission to Measure & Verify Digital Ad Integrity
June 30, 2021
Table of contents

Today is another fantastic day for the Sapphire family as we welcome Integral Ad Science as the newest multi-billion dollar public company (NASDAQ: IAS). As we reflect on this milestone, we couldn’t have made it here without an incredible IAS team, past and present–congratulations to everyone involved!

 IAS has been a multi-stage journey for Sapphire. We first invested six years ago when we led the Series E. The business was rapidly growing and cash-flow positive (a rarity these days), so the team was able to control its own destiny and invest back into the business. 

Three years later, Vista Equity Partners acquired a large stake in the company, a transaction where we had the opportunity to sell or rollover our equity stake. Our conviction in IAS had only grown over the years, and we were bringing in a new and experienced team we believed would take the business to another level. Suffice it to say, we’re happy with the decision to hold-on to the thesis and be part of this road to IPO. We would be remiss not to thank Vista, an expert in bolstering companies, for getting the most out of the IAS team. This is what they do and we look forward to partnering with them again in the future.

When we decided to stay the course with IAS, investing as businesses approach and enter the public markets was a new strategic move for Sapphire. Now, rather than selling at the earliest opportunity and locking in a return, we often choose to double down over the lifetimes of many of our companies and frequently invest further at the IPO.  

More than 10 years since its founding, we’re thrilled for IAS’ team on the IPO. We’re proud to see the company enter this next phase of growth in what we are confident will be a long and storied journey as a public company. 

IAS Uncovers an Opportunity to Set Quality Standards for Digital Ads

The age-old adage “half the money I spend on advertising is wasted, but the trouble is I don’t know which half” holds more true today than ever before as advertisers try to keep up with consumers’ changing habits and the revolving door of digital trends. 

No one wants to spend dollars on an ad campaign that is never going to be seen by the right audience, isn’t aligned with your brand, or worse yet, is actually a bot. The problem grows larger as digital advertisers have to manage campaigns across devices, channels and formats, including desktop, mobile, CTV, social, display, video and more. 

Before IAS, brands and their agencies relied on publishers and ad platforms to self-report results of digital ads with no easy way to compare the effectiveness of campaigns and mediums. And they certainly didn’t have access to a global benchmark of success. Publishers employed varying reporting metrics, and they themselves worried over the efficient use of inventory. In addition, the rise and prominence of walled gardens enhanced the need for an independent platform to gauge true visibility.

IAS saw an opportunity to set the standard as an independent evaluator of digital advertising quality, verifying that digital ads are served to a real person rather than a bot, viewable on-screen and appear in a brand-safe and suitable environment in the correct geography. In this way, advertisers optimize their ad spend and better measure consumer engagement with campaigns across platforms, while publishers improve inventory yield and revenue.

Further, IAS has integrations with all major advertising and technology platforms and uses advanced AI to process 100+ billion daily web transactions across Amazon, Facebook, Google, Instagram, LinkedIn and others to deliver real-time analytics on campaign performance and track where every digital dollar goes. IAS customers now consist of 2,000+ advertisers and publishers across 111 countries.  

Continued Opportunity in Adtech

The world has fallen back in love with adtech and IAS is a clear example of the opportunity in the space. The industry is not without challenges, but we have seen success stories across other Sapphire investments including 6sense, Attentive, Adverity, Braze and OpenX, and exited companies like Criteo, ExactTarget, Krux, Marin, Segment and Tremor. It’s an industry with plenty of possibilities, and as the adtech world changes (i.e. cookies going away, limiting the power of the big platforms, enhanced privacy, etc.), companies like IAS are at the forefront of providing innovative solutions.

In another example of just how popular adtech is today, Shopify and Instacart are two companies that are aggressively getting into the adtech fray. Furthermore, eMarketer estimates that the global non-search digital advertising market surpassed $180 billion in 2020 and will grow to over $270 billion by 2023 (15% CAGR)–a likely conservative estimate as growth in ecommerce and consumer time online far eclipses that number (44% surge in 2020 expected to taper to a respectable 20%+). It’s no wonder that according to LinkedIn, digital marketing is one of the most in-demand careers with the greatest number of job openings. In this dynamic and burgeoning industry, Sapphireis looking for companies of consequence that are changing the way brands and consumers interact. 

An Exciting Road Ahead for IAS

IPOs are always an exciting event for executives, employees and investors, so we want to wish a huge congratulations to everyone who has been part of the journey, including the company’s fearless leader, CEO Lisa Utzschneider. This is a big step in the life of the business and sets the stage for the much longer journey ahead as IAS continues to become an even greater company of consequence in the world of both advertising and tech.

Legal disclaimer

Disclaimer: Nothing presented within this article is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures, LLC (“Sapphire”). Information provided reflects Sapphires’ views as of a time, whereby such views are subject to change at any point and Sapphire shall not be obligated to provide notice of any change. While Sapphire has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein, which is subject to change. Companies mentioned in this article are a representative sample of portfolio companies in which Sapphire has invested in which the author believes such companies fit the objective criteria stated in commentary, which do not reflect all investments made by Sapphire. A complete alphabetical list of Sapphire’s investments made by its direct growth and sports investing strategies is available here. No assumptions should be made that investments listed above were or will be profitable. Due to various risks and uncertainties, actual events, results or the actual experience may differ materially from those reflected or contemplated in these statements. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. Past performance is not indicative of future results.