The location intelligence sector is in flux. Given legislation like GDPR and CCPA, as well as more impactful but less-discussed factors like mobile platform updates, there’s a new set of challenges for collecting consumer movement data. This was a key theme at Localogy’s Place conference and since.
Through requisite analyst diligence and speculation that’s ensued, we’ve examined the possibility of looming M&A activity in the sector. The thought is that restrictions on data collection could cause the need for disparate players to pool diminishing sources of quality location signals.
One example of this principle can be seen in the sector’s biggest deal last year: Foursquare’s acquisition of Placed. Though not driven by diminishing data, the principle stands that it was able to boost its data intelligence chops with more and varied sources of location data brought by Placed.
With that backdrop, our ears perked up last week when first hearing about Verve Mobile’s acquisition by Media and Games Invest. As a location-intelligence player we’ve been watching for years, it’s at the center of the location intelligence sector and could be a harbinger for further consolidation (more on that in a bit).
Media and Games Invest (MGI) is a German investment holding company that owns several interlinked media properties. Verve joins that portfolio as part-financial and part strategic investment. It’s location data will assist other media properties, and its U.S. presence will accelerate MGI’s geographic expansion
Speaking of geography, there’s something to be said for a European native company to help Verve navigate the dynamics and politics of GDPR. Verve will also gain additional ad inventory and distribution through MGI’s 30 total media properties, which in turn gain better ability to drive and track offline commerce.
Verve gets location data through app SDK integrations and direct relationships with publishers. These data sources are potentially impacted by iOS13 updates and legislative measures. But some risk is mitigated by diversified sources including beacons, a capability gained through Verve’s 2016 Roximity acquisition
Already, Verve’s publisher partners include the Associated Press, CBS, Flipboard, Pandora and ESPN. Now MGI’s media properties could boost and further diversify its data sources. In total Verve and PubNative collectively have more than 500 SDK integrations, reaching 600 million people per month globally.
As for ongoing M&A in this sector, CCPA could further stimulate investment activity. As mentioned by Place IQ’s Duncan McCall and further unpacked by Localogy analyst Neal Polachek on our analyst roundtable (below), legislation could create more stability which engenders investor confidence.
We’re already seeing am M&A uptick in the broader media and ad tech sectors. 15 ad tech mergers and acquisitions took place in Q4 according to Luma Partners and reported by Digiday. This happens for reasons similar but also more expansive than those driving M&A in location intelligence
As for location intelligence M&A specifically, we won’t call it a trend yet. But we stand by the previous projections that consolidation will come in 2020. January isn’t even over and we already have one big deal. We’ll keep a close eye on our radar screen and report back signals and strategic implications.