StackAdapt Secures $235M to Lead AI-Driven Programmatic Advertising Innovation

StackAdapt, a Toronto-based programmatic advertising startup, has raised a significant $235 million in equity funding. The round was led by Teachers’ Venture Growth (TVG), the investment arm of the Ontario Teachers' Pension Plan. Also participating were Intrepid Growth Partners, a firm with offices in Toronto and London, along with several unnamed investors.

This funding is one of the largest for a Canadian startup, though not the biggest. Last year, fintech companies like Clio, Cohere, and Tenstorrent raised sums ranging from $500 million to $900 million. The trend in Canadian startup investments mirrors global shifts, with artificial intelligence companies securing a substantial portion of venture funds in 2024, despite a decline in the overall number of deals.

StackAdapt, founded in 2014, had previously flown under the radar until 2022 when it received a $300 million investment from Summit Partners. At that time, PitchBook estimated the company’s valuation at over $600 million. While the current round’s valuation remains undisclosed, sources indicate it’s now valued at around $2.5 billion, with annual revenues of $500 million.

The impressive size of this funding round signals not only the company’s current stature but also its strong local backing as it plans its next growth phase. StackAdapt’s platform harnesses AI to optimize programmatic advertising — a critical tool in today’s digital marketing ecosystem. Programmatic ads now dominate over 90% of the advertising market due to their ability to automate ad placements and provide marketers with detailed insights into their performance.

StackAdapt partners with clients across various industries, including political campaigns, retail, B2B, travel, healthcare, and finance, providing advertising solutions across native ads, display, video, connected TV, audio, and more. However, the rise of AI and automation has introduced new challenges, such as ad fraud and difficulties with brand safety and data protection.

For StackAdapt, these hurdles present both challenges and opportunities. CEO Vitaly Pecherskiy explained, “After a slowdown in 2022-2023, companies are now focused on growth while prioritizing cost-effectiveness through automation and AI. We’re seeing strong demand for our product.”

The company’s AI draws on years of expertise in ad traffic analysis, using this knowledge to reduce fraud and combat bot traffic. TVG’s Rick Prostko expressed confidence in StackAdapt’s future, stating, “We are proud to support StackAdapt as it aims to become the global leader in AI-driven advertising. The company’s consistent growth, profitability, and commitment to delivering customer value are truly impressive.”