Foundry’s TechTarget-Like Transformation Ends in Sale

Blackstone-owned International Data Group (IDG, Inc.) announced on Thursday that it sold Foundry (itself a rebrand of IDG (minus the Inc.) to Regent LP, a private equity firm that owns a number of military-specific media brands and Cheddar. This leaves IDG, Inc. with just IDC, its market research and advisory firm.

Foundry operates well-known brands in technology, including CSO and CIO, along with a network of consumer-facing brands like Macworld and PCWorld.

Over the last five years, Foundry has been on a rebuild, transitioning from a traditional media company of publications and events into something that looks more like TechTarget. In both companies’ cases, the strategy has been to build a full-funnel marketing platform that allows B2B markets to promote to the right folks at the right time.

This divestiture is a big change from the original plan of taking IDG public. Back in 2021, soon after Blackstone acquired the business, Mohamad Ali, then CEO of IDG, Inc., told Adexchanger:

We are currently on a three-year path to be IPO-ready that started at the end of 2019. Our goal is to be IPO-ready [by] the end of 2022.

The successful exit vision, from Blackstone’s perspective, is to own the ABM data layer, and with it you can buy and integrate other pieces that can be fueled by that data.

They aren’t thinking small, like growing a $1.3 billion business to $2 billion. If somebody comes along and has a truly compelling mar tech solution for the B2B upper funnel – that’s a $20 billion business.

That may have been the plan, but then the economy turned, inflation skyrocketed and the technology ad markets came to a halt. It’s hard to take a business public in that environment.

And so, you can then look and see that a demand generation business like Foundry doesn’t quite fit with a market research and advisory firm like IDC. I suspect Blackstone and management looked at Gartner, which trades at a 21.7x EV/Adjusted EBITDA multiple, and realized that a pure-play business in IDC might actually make the most sense and decided to sell Foundry.

Now if Blackstone decides to take IDC out to market—either through a public offering or in a sale to another entity—it’s a much cleaner story.

Tech Stack Through M&A

This isn’t meant to diminish Foundry, because it has done an impressive job transitioning from mostly selling its brands and events to something more akin to a B2B marketing platform. It did that through four key acquisitions:

• Tribilio in June 2020: A SaaS platform for account-based marketing.
• KickFire in September 2021: A tool that allows B2B marketers to de-anonymize website traffic.
• LeadSift in December 2021: A platform that provides intent data from across the web.
• Selling Simplified in February 2022: A Marketing-as-a-Service (MaaS) platform with lead generation products, data services and analytics capabilities.

By integrating those four technologies across its suite of media brands, Foundry is now in the position to act as a more full-funnel partner with its B2B marketers. You can see that with the product offerings that Foundry offers. As the page says, “hit your marketing goals with a connected brand-to-demand strategy.”

The potential is impressive. Imagine a user on CIO.com. They may be anonymous, but with a newsletter or a simple offer, they go from anonymous to known. From there, Foundry can track exactly what that user is engaging with. That helps inform their intent. Using KickFire’s API, marketers can, theoretically, know when one of those Foundry readers lands on their site anonymously. And using Selling Simplified’s offerings, that same marketer can get a message to that original CIO user.

This is, at least, how it should work. It has a large top of funnel with the Foundry portfolio and then it is incrementally gathering data—both on its owned & operated as well as on its partner’s websites—and then is able to drive targeted, demand gen capabilities.

This sophisticated marketing and data infrastructure mirrors that of TechTarget. As I wrote when Informa first announced its acquisition of TechTarget:

First, this produces an unbelievably strong full-funnel b2b marketing operation. It’ll now have an unbelievable amount of content to move users from unknown to known with both contact-level and behavioral first-party data. From there, it’ll be able to use that data to create both insights (trends, for example) as well as prove intent (how likely someone is to make a purchase). And then the right performance products can be used for the right audience. In total, you’re looking at scale of 50 million known, 1st-party data-empowered users across the two companies.

A key difference between Foundry and TechTarget is, thanks to the addition of Industry Dive, TechTarget can do this across many more verticals.

Cyclical Markets?

What’s unclear is how Foundry is doing as a business. To some extent, we can use TechTarget as a barometer because they have similar capabilities. TechTarget is slated to report its FY 2024 financials next week, but if we look at the first nine months of 2024 compared to 2023, revenue was down year-over-year. J.P. Morgan released its equity research on the combined Informa TechTarget and had this to say:

TechTarget grew 10%, 11%, 85% and 9%, respectively, from 2019 to 2022. Growth began faltering in 2023, when IT majors cut back on S&M expenses and prioritized margins. Since then, legacy TechTarget did not experience a cyclical recovery.

From an operational perspective, maybe Foundry is in a better position; however, it’s unlikely that it was able to buck the trend of major technology companies cutting back on sales and marketing expenses. You reach a certain scale and the macro environment has a much bigger impact on the business.

These market headwinds could explain why IDG, Inc. decided to spin Foundry off at this particular moment. If we go back to the IDC/Gartner comparison, the latter has seen revenue grow from $4.7 billion in FY 2021 to $6.3 billion last year. If IDC has seen directionally this kind of revenue growth (even if absolute numbers are smaller) while Foundry looks more like TechTarget, the deal looks even more obvious.

The reshuffling of these tech media assets points to a broader evolution in the B2B marketing landscape. The current tech spending slowdown has created short-term challenges, but the fundamental value proposition of intent-driven marketing platforms remains strong.