KOLKATA: LG Electronics has acquired a majority stake in TV advertising technology, data and measurement company Alphonso Inc to give a boost to its streaming-TV business foray.
The $80 million investment gives LG a controlling stake of more than 50 percent in Alphonso, which reportedly had a pre-money valuation of about $125 million. As part of the transaction, LG will buy out Alphonso’s existing investors. Alphonso founders, current and former employees, and various advisers will hold the remaining shares.
LG plans to utilise Alphonso software and services – including the tech firm’s data analytics, media planning and activation, and video AI capabilities – with its broad range of home entertainment products. Alphonso’s combined offerings will enrich consumer services including content recommendations and LG’s own streaming service, LG Channels, to create a robust owned and operated first-screen, cross-device advertising platform with integrated analytics platform for LG TVs and the smart TV marketplace as a whole.
The move comes at a time when streaming video is witnessing its peak growth, which accelerated last year during worldwide lockdown. Hence, TV manufacturing giants are looking at capturing ad spend on video, making it a new revenue source.
“Our investment in Alphonso is a key component of our digital transformation strategy focusing on AI, big data and cloud to fundamentally change how consumers interact with their devices,” LG Home Entertainment Company president Park Hyoung-sei said.
With Alphonso’s TV data analysis capabilities, LG will be able to better fulfil consumers’ needs by providing even more customized services and content to consumers, he added.
Alphonso founder and CEO Ashish Chordia noted that the two companies have a shared vision for advancing the smart TV ecosystem through innovative software and services oriented toward modern new consumer experiences on one end, and highly flexible, lucrative advertising, planning, and measurement offerings for brands, agencies, and broadcasters on the other.
“Becoming part of LG Electronics gives Alphonso the backing of one of the world’s leaders in home entertainment products, with access to a massive global inventory of connected TV screens. We can now maximise our mutual impact on the TV marketplace as we bring our products together and deliver immense value for the ecosystem,” he said.
Chordia went on to say that LG will use Alphonso’s ad-buying, data-management and other tools to build a complete streaming-TV ad sales and measurement offering.
Founded in 2012, Alphonso has been collecting TV data sets and building analytics solutions. It has previously worked with other TV manufacturers and technology firms, including LG’s market rivals Hisense, Sharp and Toshiba.
