Ad network Rocket Fuel announced that it has raised an additional $6.6 million in funding led by Northgate Capital with participation from existing investors. Total funding to-date is $26.6 million. According to the release, "Rocket Fuel’s Series 'C' funding brings its overall corporate valuation to $160 million, and based on its current run‐rate for sales and bookings, the company projects revenue of more than $50 million for 2011 alone." Read more (PDF).
Rocket Fuel CEO George John discussed the funding and its implications.
AdExchanger.com: Unlike most other private companies, you're very transparent about your company's valuation and current run rate in the press release. Why?
When you were a kid and you rode your bicycle for the first time, or, depending on your childhood, when you beat your computer chess program on its most advanced level for the first time, didn't you want to run around and tell everyone?
Rocket Fuel's transparency comes from a combination of pride and a desire to communicate progress concretely to various groups.
We are incredibly excited about the results to date. Personally, for 15 years I have been wanting to start the company that became Rocket Fuel, and it's thrilling to see everything falling into place.
Additionally, it's a win for us to share data that helps clarify that we're no longer a start-up and we're growing astronomically fast.
Being a private company only means I don't have to tell you our revenues, it doesn't mean I can't tell you.
What is driving the $50 million in revenues on the client side?
We're signing up a lot of new customers, and we have a very high retention rate of existing customers.
In particular we have been exploding in CPG (both food and nonfood) -- pickles, batteries, air freshener, frozen pizza, fish sticks.. you name it, we've run it. This is partly due to our Real-time Brand Optimization and Video offerings, and partly due to unique partnerships with offline sales metrics companies.
This year has also been great for the Automotive vertical for us, helping manufacturers with their Tier1 (national brand) and Tier2 (local lead generation) campaigns.
But we're also doing a lot in travel, financial services, telecom, technology (both consumer and business), education, dining, and a number of other verticals.
Can you provide more detail on what the $6.6 million will be used for beyond product development and "sales and marketing activities"?
We are trying to grow the company quickly but prudently in terms of both our ability to train and organize everyone as we scale, and also so that our operations are funding most of our growth. The current plan for the additional funding is international expansion and our product frontier, plus additional operating cash we may apply to a variety of uses.
We're also investing and hiring heavily in customer-facing roles across account management, operations, and analytics.
Are you near profitability? And, is the next step IPO for Rocket Fuel?
We've doubled the size of the company since our first taste of profitability and we're investing right now, but we plan on profitability in the back half of 2011. So far in Q1 we're way ahead of our plan so this is looking good.
Regarding the future of Rocket Fuel, I think advertising is a solvable problem, and our goal is to build a company whose success will stand as a monument to the triumph of reason and science over guesswork in one of the largest global industries. I have no public comments to make on the likelihood of an IPO, but if you know any good Chief Financial Officers with IPO experience we are hiring.
By John Ebbert