MediaMath founder Joe Zawadzki’s ‘Project Phoenix’ looks to raise at least $10 million to help buy back the bankrupt adtech company

• MediaMath Founder Joe Zawadzki is formalizing a bid to buy back the bankrupt adtech company.
• “Project Phoenix” is seeking to raise at least $10 million in a SAFE financing.
• Project Phoenix is being operated by team members of Zawadzki’s VC fund AperiamVentures.

According to people familiar with the situation, MediaMath founder and former CEO Joe Zawadzki is moving forward with his plan to buy back the company’s assets at the upcoming bankruptcy auction by forming a syndicate of investors known as “Project Phoenix.”

According to documents obtained by Insider, Project Phoenix, which is run by members of Zawadzki’s venture capital firm AperiamVentures, is looking to raise up to $10 million through a SAFE — simple agreement for future equity.

The investment is being raised by Project Phoenix, which is registered as Phoenix Project Acquisition Inc., with a “post-money valuation cap” of $20 million — the maximum price at which investors can convert their SAFE investment notes into equity.

According to the documentation, SAFE investments will be converted into preferred shares if and when the acquired company raises its first equity round.

According to a source close to the situation, if Project Phoenix wins the auction, it will most likely need to raise additional funds. In most cases, a bidder in a bankruptcy auction must provide a substantial deposit as well as documentation demonstrating its ability to close the transaction. It is not guaranteed that it will submit the winning bid.

According to the documentation, Project Phoenix’s president is Jeffrey Hirsch, a former executive at the adtech companies PubMatic, AudienceScience, and ValueClick. His listed email address is from AperiamPartners. Hirsch’s involvement was also confirmed by three different sources familiar with the situation.

Hirsch and Zawadzki did not respond to requests for comment.

The bankruptcy auction for MediaMath is scheduled to take place in a Delaware court on Monday, August 21 — but it has already been delayed and could be delayed again. According to the documentation, Project Phoenix has given prospective investors until Friday, August 11 to sign documentation and wire funds to the SAFE.

MediaMath, a 16-year-old pioneer of the New York adtech scene, eventually struggled to compete with rivals such as Google, Amazon, and The Trade Desk. After MediaMath’s private equity owner refused to release any additional financing earlier this year, and a potential buyer unexpectedly backed out, the company filed for Chapter 11 bankruptcy on June 30.

According to the bankruptcy filings, MediaMath owes at least $125 million to hundreds of creditors. Any buyer of the company’s assets would be free of the liabilities associated with the bankruptcy process.

Last month, Zawadzki hinted to Insider that he was interested in acquiring MediaMath’s assets.

“I’d love to see this thing become an industry utility,” Zawadzki said back then. “I would love to see a ‘Project Phoenix’ here.”

According to a person with direct knowledge of the situation, Zawadzki, who was fired by MediaMath’s board in 2021, has stated that if the auction bid is successful, he intends to be executive chairman of the revived MediaMath.

According to the source, Project Phoenix intends to rehire former MediaMath employees as well as some clients who found it difficult to migrate to rival demand-side platforms following the company’s demise. Many AperiamVentures clients also used MediaMath as a DSP, so the technology would most likely be turned back on, the person added.

Update: August 11, 2023 — The date of the bankruptcy auction was incorrect in an earlier version of this story. The date is August 21, not August 14.