The investment bank Luma Partners says “there is cause for optimism” within the digital media and marketing tech ecosystem as the new year begins. After 2023 was a “period of survival” for many, it says the digital space “rebounded” last year, and it expects those trends to continue.
“Entering 2025, the ecosystem is transitioning from a period of revival to a thriving, dynamic market as momentum mounts across trends of innovation and growth,” the firm says. “Looking ahead to 2025, the digital ecosystem is poised for growth in an improving macro environment, supported by sector rationalization/consolidation, regulatory clarity, and AI-driven innovation — all serving as strong foundations for the ecosystem to thrive.”
Deal-making is what drives Luma’s view of the digital marketplace, and it says 2024 ended with momentum continuing into the final quarter of the year. It says there was an “uptick in dialogue” in recent quarters and that delivered a 28% increase in deal activity during the fourth quarter vs. a year earlier. It was also up 5% from Q3. Luma says it marks the fourth consecutive quarter of growth, which it says is “signaling optimism” for 2025.
Luma says the deals that were completed last year were largely categorized as “rationalization” or “consolidation” transactions and reflected an effort by companies to enter a new channel, geography, or customer segment. While ad tech deal volume increased the most year-to-year, climbing 73%, Luma says M&A volume for digital content in 2024 ticked up 7% from 2023.
It wasn’t just deals either. On the financing front, Luma says early-stage VC investments grew 14% year-over-year during the fourth quarter, although it says late-stage funding continued to face headwinds. AI funding continues to be a bright spot, capturing roughly 30% of VC dollars in 2024.
Download Luma’s full report HERE.
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