AppNexus Files Confidentially for IPO


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AppNexus Inc., an automated online-advertising technology company, has confidentially filed paperwork for an initial public offering that is likely to come in the second quarter of 2017, according to people familiar with the matter.

The company, which was valued at $1.8 billion in a 2015 funding round, could seek a valuation between $1.5 billion and $2 billion in the offering, though pricing talk is still fluid, the people said. AppNexus has tapped Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. to serve as the lead underwriters on the offering, they added.

The company's decision to move forward with an offering is the latest sign that a dry spell for technology company IPOs could come to an end next year. Snap Inc., the parent of mobile app Snapchat, also has confidentially filed paperwork for an IPO that could come as early as March and value the company at as much as $25 billion.

AppNexus is among a cohort of companies that sought to shake up the online-advertising business model by directly connecting buyers and sellers of ad space. But the business has become overcrowded and commoditized, hitting the stocks of ad-tech companies that have gone public in recent years. Shares of Rubicon Project Inc. and Rocket Fuel Inc., among others, initially soared before falling far below their IPO prices.

Yet the dearth of tech company IPOs has boosted Trade Desk Inc., the only ad-tech company to debut this year. The company's shares are currently trading nearly 50% above its IPO price, reflecting investors' hunger for new listings.

AppNexus has said it has distinct technology, having built a platform connecting to publishers that rivals Alphabet Inc.'s breadth of digital advertising options via Google. News Corp invested $10 million in AppNexus earlier this year as part of a strategic partnership. News Corp is the parent of The Wall Street Journal.

AppNexus recently restructured its business model to streamline how it sells advertisements to clients, and in doing so cut roughly 10% of its staff. The company hopes the changes, which were made in the third quarter, will boost profits and lead to a higher IPO valuation, according to a person familiar with the matter.

Write to Maureen Farrell at maureen.farrell@wsj.com and Telis Demos at telis.demos@wsj.com


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This article appears in: IPOs
Referenced Symbols: FUEL , GOOG , GOOGL , GS , JPM


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