The Led Targets Retail Media Growth with Acquisitions

The Led, a company with over a decade of experience in digital display infrastructure, is strategically shifting its focus to capitalize on the rapidly expanding retail media sector in Brazil. Rather than directly competing with its established out-of-home (OOH) clients, the firm is leveraging its extensive network of digital screens within retail environments to empower retailers in monetizing their own advertising spaces.

This strategic pivot is underscored by recent acquisitions. The Led has integrated TailyAds, a two-year-old venture led by Heitor Pontes, who now assumes the role of Director of New Business. This move bolsters The Led's commercial capabilities, enhancing its ability to engage with brands and retailers and expand its network reach. This follows last year's acquisition of Retail Media, a company already active in in-store advertising sales, which brought valuable inventory, client relationships, and a specialized team into The Led's fold.

The retail media market in Brazil presents a significant growth opportunity. Projections indicate that retail media will constitute 16.3% of all digital advertising expenditure in the country this year, a substantial increase from just 2.3% in 2020. By 2030, this share is expected to climb to 22.2%, according to eMarketer. The Led aims to capture a meaningful portion of this expanding market by offering a comprehensive solution that includes screen installation, content management, and advertising monetization.

Founded in 2010 by Richard Albanesi, The Led initially focused on providing LED screen rentals for events. As the cost of fixed installations decreased, the company evolved to offer end-to-end solutions for permanent digital displays in various venues, including prominent projects for retailers like Riachuelo and platforms such as Magalu. The company's expertise is evidenced by installations like the LED tunnel at Shopping Cidade Jardim and projects for entities like Nubank.

Fueling this new growth phase, The Led secured a significant investment of R$ 150 million from Kinea late last year. This capital infusion is earmarked for accelerating the company's expansion strategy. Currently, The Led operates approximately 15,500 screens across 5,500 retail locations, with plans to increase this number to 20,000 screens by the end of the current year. The company reports an annual capital expenditure of R$ 80 million to R$ 100 million and a top-line growth exceeding 30% year-over-year, with an ambitious target to double its size within three years.

While the core business of screen infrastructure and installation currently accounts for roughly 80% of The Led's revenue, the company anticipates a shift in this balance. The remaining 20% is generated from media monetization, with Grupo Pão de Açúcar being a key partner in this vertical. Albanesi believes the retail media segment will experience faster growth, gradually increasing its contribution to the company's overall financial performance.

The Led's strategy explicitly avoids direct competition with established OOH media companies such as Eletromidia, NEOOH, and RZK. The company intends to continue providing infrastructure, installation, and maintenance services to these partners, steering clear of bidding for public space advertising contracts. Albanesi acknowledges that while The Led competes for advertising budgets across all media channels, its focus remains on empowering retailers rather than challenging the traditional OOH market.