Brand Experience

Brainlabs Skyrockets to $320M Valuation Amid Market Slowdown

19 September, 2023

Despite a general slowdown in the advertising market, UK-based digital marketing agency Brainlabs has seen its valuation surge to $320 million, an eightfold increase from its previous round of fundraising. This is a testament to the resilience of data-driven advertising in an era where many companies, particularly those in the tech sector, are looking to trim their advertising budgets.

While larger advertising firms have been hit by reduced ad spending, digital marketing agencies like Brainlabs have managed to thrive. Today, over two-thirds of the advertising market has transitioned to digital advertising, spanning online platforms and connected TVs.

Brainlabs’ recent financial boost comes from an investment by US private equity firm Falfurrias Capital Partners, founded in 2006 by former Bank of America chair and CEO Hugh McColl Jr. The funds will be used to broaden Brainlabs’ global footprint, with new offices planned for various markets across Europe, Asia Pacific, and Latin America. This expansion is part of Brainlabs’ strategy to challenge the big advertising groups that have traditionally dominated the market.

The company’s current valuation reflects its impressive performance, generating over $1bn in client billings. This is a significant leap from its valuation during the last round of fundraising four years ago. According to Brainlabs’ founder Daniel Gilbert, the company had the option to sell itself to one of the large agencies. However, they chose to leverage their strengths in some of the fastest-growing areas of the market to compete directly with these giants.

Instead of going public, Gilbert stated that private equity capital was a more suitable financing option for the company as it pursues rapid expansion. Stephen Allan, former chair and CEO of WPP-owned MediaCom, now serves as the chair of Brainlabs. Allan sees a “very real opportunity” for Brainlabs to scale up and cater to an increasing number of multinational and global clients.

Brainlabs specialises in creating and purchasing advertising for clients such as Estée Lauder, Adidas, and WeTransfer. These ads are bought through complex real-time online auctions, a method that now dominates the media market. Advances in AI technology have made it possible for brands to target advertising to consumers more precisely, essentially enabling personalised advertising on a large scale.

The effectiveness of digital media is also much easier to measure. WPP-owned GroupM predicts that digital advertising will make up over two-thirds of the $598.5bn expected in global revenues this year. Despite the slowing growth—a reflection of the market’s maturity—revenues are still projected to rise by more than 8% this year.

Gilbert also revealed that Brainlabs plans to acquire companies and technologies that can aid its expansion. Since its establishment in 2012, the company has already completed eight acquisitions. Currently, Brainlabs employs over 850 people.

In conclusion, Brainlabs’ success story is a testament to the power of digital marketing in today’s world. Whether it’s Gym Marketing or Facebook Ads, the ability to target specific audiences and measure impact makes digital advertising an attractive avenue for businesses. As more and more businesses strive for More Gym Members or better Gym Lead Generation, companies like Brainlabs are poised to lead the way in this digital revolution.