Social ad network RadiumOne announced that it has raised $21 million of Series B funding in a round led by Crosslink Capital. According to the release, "The latest funding round will primarily be used for international expansion and acquisitions. (...) The Company, which reached profitability in Q4, will use its existing and new capital for potential acquisitions designed to give the company additional resources and tools to effectively scale." Read the release.
RadiumOne Founder and CEO Gurbaksh Chahal discussed the new funds and his company's strategy.
AdExchanger.com: What's your take on the funding environment for ad tech and ad networks, in particular?
GC: Legacy ad networks that focus just on commoditized behavioral targeting aren’t getting funded. New ad networks with a solution that truly is differentiated have gotten interest especially around the social space. The winner will eventually be the one that can derive the most value, have the most capital to invest in creating unique products, and have the best to team to execute its vision.
Why did you choose Crosslink Capital to lead this round?
We received various inbound interest over the last 90 days. Originally, we were planning on raising up to $50 million. But we realized that since we reached profitability in Q4 and still have most of our previous $12.5MM that we raised, we should just raise enough that supports our acquisition and international expansion strategy. Crosslink’s partner, Jim McLean was also a former partner at 3i who invested in BlueLithium, so that personal connection also swayed my decision vs. others that pitched to lead this round.
As social media proliferates, there is a lot of talk about social graphs and interest graphs as targeting vehicles. How does ShareGraph differ? Why is a patent on sharing defensible?
The traditional Social Graph means that you and I have some vague relationship, an edge of the graph does not tell how strong / real the connection is and what kind of interest / commercial intent we are sharing so the ads aren’t really relevant.
The ShareGraph™ means that there was some action between you and I – we have a real connection of “influencer vs. influencee” and we know what kind of interest / intent we are sharing. For example, when you send me an article on android phones or link to a coupon for www.elitetoystore.com it means that our shared interest / intent is android or toys – much more valuable ad targeting information.
We have filed a provisional patent for our ShareGraph technology because we’re not just patenting the concept, but the underlying technology that ports data from a variety of sources, creates distinct connections between users, and then targets the necessary the ads behind the scenes in real-time.
Most Companies that claim to be doing something around the social space, don’t have sophisticated technology and are just doing basic lookalike targeting vs. using the underlying behavior of “sharing” to establish distinct connections.
At this stage of your company, any particular experiences you're drawing from your Blue Lithium days to form strategy?
We’re much more focused than BlueLithium was at this stage. We’re growing faster (employee wise, geographically, and most importantly revenue/profitability wise). We see ourselves in a unique position, since the technology we’ve built is a light years ahead of any competition. We also have the ability to lock up certain data assets that could create the first defensible ad network. Something we couldn’t do at BlueLithium since behavioral data became commoditized.
In the release, you identify international expansion and acquisitions as a key use of your just-announced $21 million raise. How do you address the European opportunity considering the challenges around the use of data and privacy? Or is it more about selling non-U.S. audience available through U.S. publishers?
We don’t collect any personally identifiable information and have built a product that revolves around establishing connections through social sharing data and using simple anonymous cookie stitching. Therefore, our inroads in Europe won’t have any privacy issues. We’ve already had a successfully launch in the UK and have hired a great leader in that region, Rupert Staines, to rollout the rest of our European strategy. DFJ Esprit who is also an investor in this round is a European VC firm (also former 3i Partners), that will assist Rupert and I in making sure we dominant Europe and own social in that geography.
By John Ebbert