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Brainlabs to grow dramatically after fundraising drive

UK-based digital marketing agency Brainlabs has demonstrated remarkable resilience in the face of a broader market slowdown, significantly increasing its valuation to $320 million—a more than eightfold surge—through its recent fundraising efforts. This achievement stands as a testament to the enduring strength of data-driven advertising.

While major advertising agencies have recently raised concerns about declining ad spend, particularly among clients in the technology sector who seek cost-cutting measures, specialized digital marketing firms like Brainlabs have proven to be more adaptable. Currently, over two-thirds of the market has shifted towards digital advertising across various online platforms and connected TVs.

Brainlabs secured a substantial investment from the US private equity firm Falfurrias Capital Partners, founded in 2006 by former Bank of America chair and chief executive Hugh McColl Jr. This financial boost will facilitate Brainlabs’ expansion into new geographical markets, including Europe, Asia Pacific, and Latin America, where it aims to compete more aggressively with the dominant advertising groups.

The latest valuation of Brainlabs, which manages over $1 billion in client billings, marks an eightfold increase from its previous fundraising round. Founder Daniel Gilbert shared that although the company had the opportunity to be acquired by one of the major agencies, it has chosen to leverage its strengths in the fastest-growing segments of the market, positioning itself as a direct competitor.

In opting for private equity investment over a public listing, Brainlabs seeks a more efficient means of financing its rapid expansion. Stephen Allan, the former chair and chief executive of WPP-owned MediaCom, serves as the chair of Brainlabs and sees substantial potential for the company to scale its business while representing an increasing number of multinational and global clients.

Brainlabs specializes in creating and procuring advertising for clients like Estée Lauder, Adidas, and WeTransfer, employing real-time online auctions that dominate the contemporary media landscape. Advancements in AI technology enable precise targeting of advertising to consumers, effectively delivering personalized advertising at scale. The quantifiability of the impact of digital media further enhances its appeal.

According to WPP-owned GroupM, digital advertising is expected to account for over two-thirds of the projected $598.5 billion in global revenues this year. While growth rates may slow due to market maturation, revenues are still anticipated to grow by more than 8% this year.

Gilbert also announced Brainlabs’ intention to acquire companies and technologies that support its expansion efforts. Since its founding in 2012, the company has already completed seven acquisitions and boasts a workforce of over 950 professionals.