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Flippa raises $11M to match online asset and business buyers, sellers
Flippa, an online marketplace to buy and sell online businesses and digital assets, announced its first venture-backed round, an $11 million Series A, as it sees over 600,000 monthly searches from investors looking to connect with business owners.
OneVentures led the round and was joined by existing investors Andrew Walsh (former Hitwise CEO), Flippa co-founders Mark Harbottle and Matt Mickiewicz, 99designs, as well as new investors Catch.com.au founders Gabby and Hezi Leibovich; RetailMeNot.com founders Guy King and Bevan Clarke; and Reactive Media founders Tim O’Neill and Tim Fouhy.
The company, with bases in both Austin and Australia, was started in 2009 and facilitates exits for millions of online business owners, some that operate on e-commerce marketplaces, blogs, SaaS and apps, the newest data integration being for Shopify, Blake Hutchison, CEO of Flippa, told TechCrunch.
He considers Flippa to be “the investment bank for the 99%,” of small businesses, providing an end-to end platform that includes a proprietary valuation product for businesses — processing over 4,000 valuations each month — and a matching algorithm to connect with qualified buyers.
Business owners can sell their companies directly through the platform and have the option to bring in a business broker or advisor. The company also offers due diligence and acquisition financing from Thrasio-owned Yardline Capital and a new service called Flippa Legal.
“Our strategy is verification at the source, i.e. data,” Hutchison said. “Users can currently connect to Stripe, QuickBooks Online, WooCommerce, Google Analytics and Admob for apps, which means they can expose their online business performance with one-click, and buyers can seamlessly assess financial and operational performance.”
Online retail, as a share of total retail sales, grew to 19.6% in 2020, up from 15.8% in 2019, driven largely by the global pandemic as sales shifted online while brick-and-mortar stores closed.
Meanwhile, Amazon has 6 million sellers, and Shopify sellers run over 1 million businesses. This has led to an emergence of e-commerce aggregators, backed by venture capital dollars, that are scooping up successful businesses to grow, finding many through Flippa’s marketplace, Hutchison said.
Flippa has over 3 million registered users and added 300,000 new registered users in the past 12 months. Overall transaction volume grows 100% year over year. Though being bootstrapped for over a decade, the company’s growth and opportunity drove Hutchison to go after venture capital dollars.
“There is a huge movement toward this being recognized as an asset class,” he said. “At the moment, the asset class is undervalued and driving a massive swarm as investors snap up businesses and aggregate them together. We see the future of these aggregators becoming ‘X company for apps’ or ‘X for blogs.’ ”
As such, the new funding will be used to double the company’s headcount to more than 100 people as it builds out its offices globally, as well as establishing outposts in Melbourne, San Francisco and Austin. The company will also invest in marketing and product development to scale its business valuation tool that Hutchison likens to the “Zillow Zestimate,” but for online businesses.
Nigel Dews, operating partner at OneVentures, has been following Flippa since it started. His firm is one of the oldest venture capital firms in Australia and has 30 companies in its portfolio focused on healthcare and technology.
He believes the company will create meaningful change for small businesses. The team combined with Flippa’s ability to connect buyers and sellers puts the company in a strong leadership position to take advantage of the marketplace effect.
“Flippa is an incredible opportunity for us,” he added. “You don’t often get a world-leading business in a brand new category with incredible tailwinds. We also liked that the company is based in Australia, but half of its revenue comes from the U.S.”
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Tips for managing growth across iOS updates
“I’ve seen startups spend thousands of dollars inefficiently as a result of not having optimal signal in their paid acquisition campaigns. I’ve also spent millions at companies such as Postmates refining our signal to the best possible state,” says growth marketer Jonathan Martinez in a guest column for Extra Crunch this week. “I’d like every startup to avoid the painful mistake of not having this set up correctly, instead making the most of every important ad dollar.”
The TechCrunch team has been busy this past week, especially with Disrupt next week and the iOS 15 release date quickly approaching. If you haven’t already registered for Disrupt, it’s not too late to get a ticket. We’re excited for all of the sessions, including “The Subtle Challenges of Assessing Product-Market Fit” on Tuesday, September 21 from 2:05 PM – 2:45 PM EDT the Extra Crunch stage. The marketing world was full steam ahead this past week, Martinez covered how to optimize signal and Miranda Halpern spoke with Vivek Sharma, CEO of Movable Ink about the impact that iOS 15 will have on email marketers. We also had guest posts from Bryan Dsouza of Grammarly and Xiaoyun TU of Brightpearl. More details below.
Help TechCrunch find the best growth marketers for startups.
Provide a recommendation in this quick survey and we’ll share the results with everybody.
If you didn’t already hear, we’re giving away one free ticket to Disrupt, through the Experts survey. Check out the schedule for Disrupt, and read on to learn about the giveaway details:
- Have you already submitted a recommendation? That’s great — we’re counting all previous survey submissions as an entry for the Disrupt ticket.
- We’ll also enter the next 100 survey submissions into the giveaway.
- Do you want to submit 10 recommendations to increase your chance at winning? We love the enthusiasm, but we ask that you only submit one recommendation for each marketer that you’ve worked with.
- Don’t know what to say in your recommendation? Start with what traits they had, what they did to help your company, how their work affected your business and go from there!
- We manually go through all entries, so please don’t copy and paste the same response multiple times.
- Have a question about the giveaway? Send us an email at ec_editors@techcrunch.com.
- The survey will stay open, but we won’t be counting submissions as entries to this giveaway after Sunday, September 19, 11:59 pm PT.
Marketer: Andrew Race, Juice
Recommended by: Orin Singh, Merchant Industry
Testimonial: “We were referred to Juice by a family friend of my company’s owner and as a personal courtesy they said they were giving us their best guy. Naturally we thought that is what everyone says but they were not kidding. Andrew was singularly leagues above our previous marketing company. Having someone so knowledgeable and willing to learn a new industry proved to be the turning point for us.”
In growth marketing, signal determines success: Martinez learned from his mistakes, and share the lessons learned with us. From selecting the signal, to how to enhance it, Martinez covers key aspects including how to take advantage of iOS 14. He says, “So how do you stay ahead and continue moving the needle on your growth marketing campaigns? First and foremost, constantly question the events you’re optimizing for. And second, leave no stone unturned.”
Marketers should plan for more DIY metrics as iOS 15 nears: The release of iOS 15 will change that playing field for marketers. They’ll have to rely on metrics that use zero and first-party data rather than relying on email open rates as the main metric. Miranda spoke with Sharma about how this release will impact the industry and what marketers should focus on. One tip from Sharma is, “Focus on down funnel metrics like clicks and conversions — that’s what it really comes down to and that’s the truest indicator of engagement.”
(Extra Crunch) Demand Curve: How to get social proof that grows your startup: Nick Costelloe, head of content at Demand Curve, dives into social proof and how startups can use it to their advantage. On social proof, Costelloe says, “Have you ever stopped to check out a restaurant because it had a large lineup out front? That wasn’t by chance. It’s common for restaurants to limit the size of their reception area. This forces people to wait outside, and the line signals to people walking past that the restaurant is so good it’s worth waiting for.”
(Extra Crunch) 5 things you need to win your first customer: Dsouza, product marketing lead at Grammarly, walks us through how to win your first customer. He includes explanations, how-tos, and practice use cases. Dsouza says,” . . .ask any founder what really proves their startup has taken off, and they will almost instantly say it’s when they win their first customer.”
(Extra Crunch) 4 ways to leverage ROAS to triple lead generation: TU, global director of demand generation at Brightpearl, walks us through ways to use return on advertising spending (ROAS). She says, “When you choose a return metric, you need to make sure it matches your company goal without taking ages to get the data.”
Tell us who your favorite startup growth marketing expert to work with is by filling out our survey.
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Marketers should plan for more DIY metrics as iOS 15 nears
Apple is planning to remove developer access to important user data as part of its iOS 15 release on Monday, leaving email marketers in a dilemma about how they will figure out metrics. To find out how the industry is approaching this problem, we spoke with Vivek Sharma, CEO of Movable Ink, a software company that helps marketers act on the data they’re collecting.
This conversation builds on our Extra Crunch post from August exploring how email marketers can prepare for Apple’s Mail Privacy Protection changes.
The game-changer for email marketers with this update is that as an Apple Mail user, you’ll have the option to hide your IP address.
How can marketers pivot their tactics to remain in control of their metrics? Sharma feels we’ll see more focus on downstream metrics rather than the open rate — on clicks, conversions and revenue. “That sounds great and everything, but you have less of that data. But by definition, that funnel kind of narrows; there are fewer people to get to at that point, so it might take you longer to know if something is working or not working for you.”
Help TechCrunch find the best growth marketers for startups.
Provide a recommendation in this quick survey and we’ll share the results with everybody.
Sharma says zero-party data is something that businesses have been focused on. “There are two components: There’s ‘open’ as a metric, and there’s some of the information you’re getting at open time, like the IP address, the time of day, and the inferred weather. Things like the IP address, time of date, etc. are perceived as data leakage. These are just a couple of the data points that marketers will lose access to. Therefore they are using first and zero-party data which they have already been investing in.”
The challenge, according to Sharma, is: How can marketers collect zero-party data in an interesting, visually appealing way, and then personalize its contents for every customer at scale?
One way that Movable Ink has collected zero-party data is displayed below:
Image Credits: Movable Ink
Sharma says, “Everything in here is a polling question: ‘What do you typically shop for?’ ‘What’s your shoe size?’ And they’re giving you loyalty points in return, so there’s an exchange of value happening here. They’re learning about you in a clear way and giving you an easy way to engage with the brand you’re interested in.”
Once you have the data, the question is: How do you use it? Below we see an example from JetBlue.
Image Credits: Movable Ink (opens in a new window)
Sharma outlines three takeaways from iOS 15 for email marketers:
- Focus on down-funnel metrics like clicks and conversions — that’s what it really comes down to and it’s the truest indicator of engagement.
- Invest in your zero and first-party data assets. True personalization is what people experience and what they see. You can do that from your zero and first-party assets.
- Email is a great channel to engage your customers, because it’s a mature one that’s been invested in. Email is an awesome channel for building a one-to-one relationship with your customer, and far more. It has gone through lots of changes over the last 10 or 15 years. The industry will evolve and we’ll find that balance of privacy and personalization.
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Extra Crunch roundup: Adtech investing, Intuit buys Mailchimp, ideal customer profiles
Major gains in online advertising have boosted valuations for adtech startups since the pandemic began, but one insider says investors are missing the party.
“Adtech is having a moment,” writes industry veteran Casey Saran.
“And while much of the oxygen has been soaked up by large legacy companies hitting the public market, there have been smaller deals that indicate a hunger for better creative adtech.”
Saran shares five reasons “why VCs should consider ratcheting up their investment into adtech startups building the next generation of creative tools.”
Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription
On Wednesday, September 22 at 9:05 a.m PT, I’m moderating “The Path for Underrepresented Entrepreneurs,” a panel discussion at Disrupt 2021.
Our conversation will examine some of the unique challenges facing founders from historically marginalized groups, the strategies they used along the way, and the disruptive changes we need to consider if we want to see fundamental change.
I’ll be speaking with:
- Hana Mohan, founder & CEO, MagicBell
- Leslie Feinzaig, founder & CEO, Female Founders Alliance
- Stephen Bailey, co-founder & CEO, ExecOnline
I hope you’ll attend; we’ll take audience questions after our discussion concludes. Thanks very much for reading Extra Crunch this week, and have a great weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
5 things you need to win your first customer
Image Credits: AndrewLilley (opens in a new window) / Getty Images
Congratulations on shipping your product, but how much do you know about your target customers?
Companies that haven’t created an ideal customer profile and performed a SWOT analysis are making big bets on guesswork and intuition. Sometimes that works out, but more frequently, it leads to tears.
In a guest post that walks readers through the fundamentals of creating customer personas that map to your company’s goals, Grammarly product marketing lead Bryan Dsouza shares five basic requirements for customer acquisition.
“Understanding and executing on these things can guarantee you that first customer win, provided you do them well and with sincerity,” he says.
“Your investors will also see the fruits of your labor and be comforted knowing their dollars are at good work.”
4 ways to leverage ROAS to triple lead generation
Image Credits: joshblake (opens in a new window) / Getty Images
In school, it’s highly unethical to copy someone else’s work and pass it off as your own. In business, however, it is expected.
Xiaoyun TU, global director of demand generation at Brightpearl, wrote a comprehensive guide for how to use the key metric of return on advertising spend (ROAS) to triple your company’s lead generation.
“A ‘good’ ROAS score is different for each company and campaign,” she says. “If your figure isn’t where you’d like it to be, you can leverage ROAS data to create targeted campaigns and personalized experiences.”
3 strategies to make adopting new HR tech easier for hiring managers
Image Credits: porcorex (opens in a new window) / Getty Images
Most of us prefer to trust our instincts instead of letting automated tools help us make decisions, particularly when it comes to hiring. But that’s not smart.
If your startup relies on an ad hoc hiring process, you’re probably not tracking candidates properly, there’s likely little consistency regarding how they’re treated, and bias can play a major role in who gets hired.
It’s fine to be skeptical of automated hiring tools — but not ignorant.
What could stop the startup boom?
Image Credits: Nigel Sussman (opens in a new window)
In yesterday’s edition of The Exchange, Anna Heim and Alex Wilhelm speculated about the conditions that could combine to cool off a hot startup market currently fueled by low interest rates and a sweeping digital transformation.
“From where we stand, the factors underpinning the startup fundraising boom appear solid and unlikely to unwind overnight. Still, no golden period shines forever, and even today’s luster will eventually tarnish.”
Intuit’s $12B Mailchimp acquisition is about expanding its small business focus
Image Credits: Smith Collection/Gado / Getty Images
Before news broke this week that Intuit was acquiring Mailchimp for $12 billion, the ’80s-born fintech giant’s biggest buy was spending $7.1 billion last year for Credit Karma.
In the last few years, Mailchimp “has been expanding upon its core email marketing functionality” with offerings like web design and CRM, writes enterprise reporter Ron Miller.
The industry watchers he interviewed said the move signals Intuit’s interest in acquiring and serving more SMB customers with a variety of tools:
- Laurie McCabe, co-founder and partner, SMB Group
- Brent Leary, founder and principal analyst, CRM Essentials
- Holger Mueller, analyst, Constellation Research
Forge’s SPAC deal is a bet on unicorn illiquidity
Image Credits: Nigel Sussman (opens in a new window)
“One of my favorite long-term issues with the late-stage startup market is that it is far better at creating value than it is at finding an exit point for that accreted value,” Alex Wilhelm writes for The Exchange. “More simply, the startup market is excellent at creating unicorns but somewhat poor at taking them public.”
That’s good news for Forge Global, a technology startup that operates a market for secondary transactions in private companies, with Alex dubbing its plans to go public via a SPAC combination “perfectly reasonable.”
Dear Sophie: Should I apply for citizenship if I have a conviction?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
At Burning Man a few years ago, I was arrested and charged with a misdemeanor for smoking marijuana in public (in my car) and driving under the influence.
I currently have a green card and want to apply for U.S. citizenship next year.
Can I? If so, how should I handle my criminal record?
— Remorseful About the Reefer
Atlanta’s sundry startups join in global VC funding boom
Image Credits: Nigel Sussman (opens in a new window)
Alex Wilhelm and Anna Heim continued their tour of U.S. cities after hitting up Chicago and Boston in recent weeks.
This time, they dug into Atlanta’s booming startup scene, which is seeing record capital inflows.
“The picture that forms is one of a city enjoying a rising tide of venture activity, boosted by some local dynamics that may have helped some of its earlier-stage companies scale for cheaper than they might have in other markets,” they write.
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Ketch raises another $20M as demand grows for its privacy data control platform
Six months after securing a $23 million Series A round, Ketch, a startup providing online privacy regulation and data compliance, brought in an additional $20 million in A1 funding, this time led by Acrew Capital.
Returning with Acrew for the second round are CRV, super{set} (the startup studio founded by Ketch’s co-founders CEO Tom Chavez and CTO Vivek Vaidya), Ridge Ventures and Silicon Valley Bank. The new investment gives Ketch a total of $43 million raised since the company came out of stealth earlier this year.
In 2020, Ketch introduced its data control platform for programmatic privacy, governance and security. The platform automates data control and consent management so that consumers’ privacy preferences are honored and implemented.
Enterprises are looking for a way to meet consumer needs and accommodate their rights and consents. At the same time, companies want data to fuel their growth and gain the trust of consumers, Chavez told TechCrunch.
There is also a matter of security, with much effort going into ransomware and malware, but Chavez feels a big opportunity is to bring security to the data wherever it lies. Once the infrastructure is in place for data control it needs to be at the level of individual cells and rows, he said.
“If someone wants to be deleted, there is a challenge in finding your specific row of data,” he added. “That is an exercise in data control.”
Ketch’s customer base grew by more than 300% since its March Series A announcement, and the new funding will go toward expanding its sales and go-to-market teams, Chavez said.
Ketch app. Image Credits: Ketch
This year, the company launched Ketch OTC, a free-to-use privacy tool that streamlines all aspects of privacy so that enterprise compliance programs build trust and reduce friction. Customer growth through OTC increased five times in six months. More recently, Qonsent, which developing a consent user experience, is using Ketch’s APIs and infrastructure, Chavez said.
When looking for strategic partners, Chavez and Vaidya wanted to have people around the table who have a deep context on what they were doing and could provide advice as they built out their products. They found that in Acrew founding partner Theresia Gouw, whom Chavez referred to as “the OG of privacy and security.”
Gouw has been investing in security and privacy for over 20 years and says Ketch is flipping the data privacy and security model on its head by putting it in the hands of developers. When she saw more people working from home and more data breaches, she saw an opportunity to increase and double down on Acrew’s initial investment.
She explained that Ketch is differentiating itself from competitors by taking data privacy and security and tying it to the data itself to empower software developers. With the OTC tool, similar to putting locks and cameras on a home, developers can download the API and attach rules to all of a user’s data.
“The magic of Ketch is that you can take the security and governance rules and embed them with the software and the piece of data,” Gouw added.
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4 ways to leverage ROAS to triple lead generation
Businesses that don’t invest in their future may not have a future to look forward to.
Whether you’re investing in your human resources or in critical tech, some outlay in the short term is always needed for long-term success. That’s true when it comes to marketing as well — you can’t market your product or service without investing in advertising. But if that investment isn’t turning into leads and conversions, you’re in trouble.
A “good” ROAS score is different for each company and campaign. If your figure isn’t where you’d like it to be, you can leverage ROAS data to create targeted campaigns and personalized experiences.
It’s vital to identify and apply the most suitable metrics based on business goals, and there’s no one best practice or one-size-fits-all method.
However, smart use of the return on advertising spend (ROAS) data can triple lead generation, as I discovered when I joined Brightpearl to restructure the marketing campaigns. Let’s take a look at some of the ways Brightpearl used ROAS to improve campaigns and increase lead generation. The key is to work out what represents a healthy ROAS for your business so that you can optimize accordingly.
Use the right return metric
It is paramount to choose the right return metric to calculate your ROAS. This will depend partly on your sales cycle.
Brightpearl has a lengthy sales cycle. On average it’s two to three months, and sometimes up to six months, meaning we don’t have tons of data on a monthly basis if we want to use new customer’s revenue data as the return metric. A company with a shorter sales cycle could use revenue, but that doesn’t help us to optimize our campaigns.
We chose to use the sales accepted opportunity (SAO) value instead. It usually takes us about a month to measure, so we can get more ROAS data at the same time. It’s the last sales stage before a win, and it’s more in line with our company goal (to grow our recurring annual revenue), but takes less time to gather the data.
By the SAO stage, we know which leads are good quality — they have the budget, are a good fit, and our software can meet their requirements. We can use them to measure our campaign performance.
When you choose a return metric, you need to make sure it matches your company goal without taking ages to get the data. It also has to be measurable at the campaign level, because the aim of using ROAS or other metrics is to optimize your campaigns.
Accept that less is more
I’ve noticed that many companies harbor a fear of missing out on opportunities, which leads them to advertise on all available channels instead of concentrating resources on the most profitable areas.
Prospects usually do their research on multiple channels, so you might try to cover all the possible touch points. In theory, this could generate more leads, but only if you had an unlimited marketing budget and human resources.
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Creative adtech is on the cusp of a revolution, and VCs should take note
2021 has been a good year to be an adtech investor. Valuations are surging, Wall Street is happy and exits are frequent and satisfying. It’s the perfect time to double down and invest in an area that has been largely ignored but is poised for major upside in the next few years: Digital creative ad technology.
Think about it. When was the last time we saw a major adtech funding round that was directed at the actual ads themselves — the messages people actually see everyday? I’d argue that now is the perfect time.
The adtech startups that can figure out how to adapt ads that can interact with the remote control, a synced smartphone or voice commands — maybe even make them shoppable — can theoretically produce a game-changer.
Here are five reasons why VCs should consider ratcheting up their investment into adtech startups building the next generation of creative tools:
Creative tech is far from being saturated
Consider how much has been spent over the 15 years on digital advertising mechanics such as targeting, serving, measuring and verification. Not to mention the trillions that have gone toward helping brands keep track of customer data and interactions — the marketing clouds, DMPs and CDPs.
Yet you can count the number of creative-centric adtech companies on one hand. This means there is a lot of room for innovation and early leaders. VideoAmp, which helps brands make ads for various social platforms, pulled in $75 million earlier this year. Given how fast platforms like TikTok and Snap are growing, it won’t be the last.
Digital ad targeting is being squeezed
Ads need to do more work today. Between regulation, cookies going away and Apple locking down data collection, we’ve seen a renewed interest in contextual advertising, including funding for the likes of GumGum, as well as identity resolution firms like InfoSum.
But the digital ad ecosystem can’t get by only using broader data-crunching techniques to replace “retargeting.” The medium is practically crying out for a creative revival that can only be sparked by scalable tech. The recent funding for creative testing startup Marpipe is a start, but more focus is needed on actual tech-driven ideation and automation.
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Amagi tunes into $100M for cloud-based video content creation, monetization
Media technology company Amagi announced Friday $100 million to further develop its cloud-based SaaS technology for broadcast and connected televisions.
Accel, Avataar Ventures and Norwest Venture Partners joined existing investor Premji Invest in the funding round, which included buying out stakes held by Emerald Media and Mayfield Fund. Nadathur Holdings continues as an existing investor. The latest round gives Amagi total funding raised to date of $150 million, Baskar Subramanian, co-founder and CEO of Amagi, told TechCrunch.
Bangalore-based Amagi provides cloud broadcast and targeted advertising software so that customers can create content that can be created and monetized to be distributed via broadcast TV and streaming TV platforms like The Roku Channel, Samsung TV Plus and Pluto TV. The company already supports more than 2,000 channels on its platform across over 40 countries.
“Video is a complex technology to manage — there are large files and a lot of computing,” Subramanian said. “What Amagi does is enable a content owner with zero technology knowledge to simplify that complex workflow and scalable infrastructure. We want to make it easy to plug in and start targeting and monetizing advertising.”
As a result, Amagi customers see operational cost savings on average of up to 40% compared to traditional delivery models and their ad impressions grow between five and 10 times.
The new funding comes at a time when the company is experiencing rapid growth. For example, Amagi grew 30 times in the United States alone over the past few years, Subramanian said. Amagi commands an audience of over 2 billion people, and the U.S. is its largest market. The company also sees growth potential in both Latin America and Europe.
In addition, in the last year, revenue grew 136%, while new customer year over year growth was 44%, including NBCUniversal — Subramanian said the Tokyo Olympics were run on Amagi’s platform for NBC, USA Today and ABS-CBN.
As more of a shift happens with video content being developed for connected television experiences, which he said is a $50 billion market, the company plans to use the new funding for sales expansion, R&D to invest in the company’s product pipeline and potential M&A opportunities. The company has not made any acquisitions yet, Subramanian added.
In addition to the broadcast operations in New Delhi, Amagi also has an innovation center in Bangalore and offices in New York, Los Angeles and London.
“Consumer behavior and infrastructure needs have reached a critical mass and new companies are bringing in the next generation of media, and we are a large part of that growth,” Subramanian said. “Sports will come on quicker, while live news and events are going to be one of the biggest growth areas.”
Shekhar Kirani, partner at Accel, said Amagi is taking a unique approach to enterprise SaaS due to that $50 billion industry shift happening in video content, where he sees half of the spend moving to connected television platforms quickly.
Some of the legacy players like Viacom and NBCUniversal created their own streaming platforms, where Netflix and Amazon have also been leading, but not many SaaS companies are enabling the transition, he said.
When Kirani met Subramanian five years ago, Amagi was already well funded, but Kirani was excited about the platform and wanted to help the company scale. He believes the company has a long tailwind because it is saving people time and enabling new content providers to move faster to get their content distributed.
“Amagi is creating a new category and will grow fast,” Kirani added. “They are already growing and doubling each year with phenomenal SaaS metrics because they are helping content providers to connect to any audience.
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Pixalate tunes into $18.1M for fraud prevention in television, mobile advertising
Pixalate raised $18.1 million in growth capital for its fraud protection, privacy and compliance analytics platform that monitors connected television and mobile advertising.
Western Technology Investment and Javelin Venture Partners led the latest funding round, which brings Pixalate’s total funding to $22.7 million to date. This includes a $4.6 million Series A round raised back in 2014, Jalal Nasir, founder and CEO of Pixalate, told TechCrunch.
The company, with offices in Palo Alto and London, analyzes over 5 million apps across five app stores and more 2 billion IP addresses across 300 million connected television devices to detect and report fraudulent advertising activity for its customers. In fact, there are over 40 types of invalid traffic, Nasir said.
Nasir grew up going to livestock shows with his grandfather and learned how to spot defects in animals, and he has carried that kind of insight to Pixalate, which can detect the difference between real and fake users of content and if fraudulent ads are being stacked or hidden behind real advertising that zaps smartphone batteries or siphons internet usage and even ad revenue.
Digital advertising is big business. Nasir cited Association of National Advertisers research that estimated $200 billion will be spent globally in digital advertising this year. This is up from $10 billion a year prior to 2010. Meanwhile, estimated ad fraud will cost the industry $35 billion, he added.
“Advertisers are paying a premium to be in front of the right audience, based on consumption data,” Nasir said. “Unfortunately, that data may not be authorized by the user or it is being transmitted without their consent.”
While many of Pixalate’s competitors focus on first-party risks, the company is taking a third-party approach, mainly due to people spending so much time on their devices. Some of the insights the company has found include that 16% of Apple’s apps don’t have privacy policies in place, while that number is 22% in Google’s app store. More crime and more government regulations around privacy mean that advertisers are demanding more answers, he said.
The new funding will go toward adding more privacy and data features to its product, doubling the sales and customer teams and expanding its office in London, while also opening a new office in Singapore.
The company grew 1,200% in revenue since 2014 and is gathering over 2 terabytes of data per month. In addition to the five app stores Pixalate is already monitoring, Nasir intends to add some of the China-based stores like Tencent and Baidu.
Noah Doyle, managing director at Javelin Venture Partners, is also monitoring the digital advertising ecosystem and said with networks growing, every linkage point exposes a place in an app where bad actors can come in, which was inaccessible in the past, and advertisers need a way to protect that.
“Jalal and Amin (Bandeali) have insight from where the fraud could take place and created a unique way to solve this large problem,” Doyle added. “We were impressed by their insight and vision to create an analytical approach to capturing every data point in a series of transactions — more data than other players in the industry — for comprehensive visibility to help advertisers and marketers maintain quality in their advertising.”
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Owner.com serves up $10.7M so that independent restaurants can get cooking
Independent restaurants don’t typically have the luxury to create their own online food ordering and delivery capabilities or negotiate for lower rates from legacy ordering platforms like the large restaurant chains do.
Here’s where Owner.com comes in. The Palo Alto-based company provides a free online ordering, delivery and marketing platform for independent restaurants that puts them on similar playing fields with the big guys. And unlike the legacy food delivery services, Owner.com restaurants own their customer data and can automate marketing campaigns.
Adam Guild is the company’s 21-year-old co-founder and CEO, a high school dropout and a Thiel Fellow, who originally started by assisting his mother’s dog grooming business that was having difficulties attracting customers. After stepping in with some online marketing methods, her business grew, and is now looking to expand into multiple locations. Guild then wanted to work with a bigger group of people and stumbled across restaurants while helping some clients create online landing pages.
With consumer demand shifting to primarily online ordering and delivery over the past 18 months, online ordering revenue is expected to double from $248 billion in 2020 to $449 billion by 2025. Ordering platforms like Doordash, Uber Eats and Grubhub control 80% of orders and typically charge between 20% and 30% per order to restaurants and additional fees to consumers.
In contrast, Owner.com is free for restaurants and charges customers a 5% convenience fee when they order from the website. Guild explained that larger restaurant chains have the buying power to negotiate lower rates, while independent restaurants do not. With the inability to keep up, some 110,000 restaurants in the U.S. closed in 2020.
Guild initially bootstrapped his company, working with large restaurant chains, like P.F. Chang’s, drive in-store orders. Then the global pandemic hit. He ended up losing all of his revenue and had to let all of his employees go but one. To add to his bad luck, he was then rejected from Y Combinator and other accelerator programs.
“For the first three days, I was depressed,” Guild told TechCrunch. “I had spent two years building a company and now it was dead. In the same way we were disrupted, I began to think there was no better position to be in than a scrappy startup. I didn’t know what the next business would look like, so I started cold-calling restaurant owners, asking how I can be helpful and what type of technology they were looking for. Many of them told me that online ordering sucked, but if they didn’t solve it soon, they would go out of business.”
One pivot and a year later with co-founder Dean Bloembergen, Owner.com closed on $10.7 million in seed funding led by SaaStr Fund, with participation from Redpoint Ventures and Day One Ventures, as well as a group of individual investors including Naval Ravikant, CNBC’s The Profit host Marcus Lemonis, The Kitchen Restaurant Group’s Kimbal Musk, DoNotPay founder Joshua Browder, Figma founder Dylan Field, The Chainsmokers and independent restaurant owners and customers of Owner.com.
Jason Lemkin, founder of SaaStr Fund, said restaurant SaaS was a space in which his firm was interested in investing, but thought it was a bit boring — there were already quite a few vendors in the space, like Toast and Grubhub, and most were just technology solutions. However, when he heard that Owner.com was a break-out company from the monotony, he said he had to take a look.
“The ability to own the customer relationship is that ultimate differentiation,” Lemkin said. “Their ultimate goal is to provide a robust technology platform to increase margins, have people order more and come back often.”
Meanwhile, Guild intends to use the new funding to continue product development and add new features like landing pages, the ability to make reservations and native apps for white-label service.
Since the launch last year, the company has reached a seven-figure run-rate and over 105% monthly revenue retention across over 700 restaurant locations, Guild said. To date, Owner.com has transacted over $18 million and helped its restaurant customers avoid paying $3 million to online order platform fees annually.
“It’s all about empowering the 40% of the restaurant industry that is run by people who started off in entry-level positions, and over the years, worked their way up to own the ‘American Dream,’ ” he added.
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