Meet System1, The Billion-Dollar Ad Tech Biz IPOing Later This Year

September 9, 2021 0 By administrator
Are you tired of SPACs already?

Too bad! There are more SPACs.

Another market entrant is the performance advertising company System1, which will list on the Nasdaq later this year, likely by November, after completing a merger with one such “special purpose acquisition company,” said CEO and co-founder Michael Blend.

System1’s SPAC arrangement isn’t analogous to other media tech SPACs right now, Blend said. The company partially acquired the web security and privacy company Protected.net in 2018, and is fully merging this year, backed by the investor Bill Foley (who owns real estate and financial services companies, plus the Las Vegas Golden Knights National Hockey League franchise).

System1 is an online advertising bounty hunter. It spends its own money to pursue commissions on certain online marketing conversions: someone signs up for an auto dealership visit, requests more information on a mortgage, downloads an ad blocker, etc.

The company is forecasting $120 million in billings in 2021, and its SPAC deal values the business at $1.4 billion.

AdExchanger caught up with Blend about his plans for System1 as a public company.

AdExchanger:  How did you end up with the owned-and-operated web services business?

MICHAEL BLEND: Our largest and our fastest-growing businesses, actually, come from us marketing our own products.

When we go public via SPAC, we’ll be acquiring Protected.net, which creates digital subscription services. We invested in the company in 2018, so have been in the business for years. But we’ll be fully acquiring it by virtue of going public.

Our largest subscription product is an antivirus security suite that competes with the likes of Avast and Norton. We’ve also launched an ad blocker, which is a subscription service. And we have Total WebShield, which monitors websites for potential malicious code. And we use our marketing platform to drive customers for that. So, in that case, we’re our own advertisers, and instead of sending customers to another company, we’re sending them to our own products.

We built this great customer acquisition platform, which we call Ramp. And if you’re creating customers for advertisers, it’s a pretty natural move to create your own products and generate customers for your own products. You’ll start seeing that more and more, with companies like AppLovin, that have a big app download network building their own apps. So we made a push into privacy and security. We didn’t have definite plans to go public at that point. We just knew that it was a natural evolution for the business.

Where does your traffic come from typically?

We buy ads on Google, Facebook or Snapchat, to name a few. A customer will click on an ad and link to a network of websites that we own. We own the mapping company MapQuest. We own Info.com, a large search engine, as well as HowStuffWorks, a knowledge-based resource site. We have category sites…

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