Facebook ad partner Nanigans is lining its coffers with $24 million in fresh funding.
The Series B round, announced Wednesday, is being led by Chinese software company Cheetah Mobile, with participation from Avalon Ventures and Wellington Management Company LLP. Nanigans’ total funding now stands at just under $33 million.
A good portion of the money, is earmarked to bring the Nanigans vision of 100% software-as-a-service status to fruition. The social and mobile ad company, which claims to handle around $500 million in annual ad spend through its automated advertising software, has been transforming itself into a dedicated SaaS player since before the departure of COO Marc Grabowski in May. Grabowski left Nanigans due to “strategic differences,” which seems to boil down to this: Nanigans CEO Ric Calvillo is looking to completely erase “managed services” as a budgetary line item.
And to do that, Nanigans needs cash to incentivise clients to sign up for annual subscriptions.
“The transition to SaaS away from managed services and the transition from just being on Facebook to being multichannel takes a lot of engineering dollars,” said Calvillo, who told AdExchanger that he expects all Nanigans clients – which include eBay, Zynga, JackThreads, Rosetta Stone, Wayfair and Fab.com, as well as a large number of app developers and gaming, ecom, travel and retail companies – to be on the fully SaaS model by the end of Q2.
As it stands, about 70% of the company’s revenue already comes from SaaS. Nanigans will no longer be accepting any new clients looking for managed services.
Although Nanigans is setting its sights on expanding into social and mobile publisher channels beyond Facebook – it already integrated with Twitter’s MoPub in November – that doesn’t mean the company isn’t still fully committed to its love affair with Facebook.
“Facebook is still our number one priority and we want to maintain our leadership position on Facebook. In fact, some of this money will continue to be invested in Facebook,” Calvillo said. “We have at least 50, 60 engineers full-time just on Facebook. But Facebook knows we need to be multichannel. They understand that we have to do that.”
The company also plans to use a portion of its new money to double headcount to around 350 within the year, as well as open new international offices in China, Japan, Germany and South America. In addition to its headquarters in Boston, Nanigans also maintains offices in New York, San Francisco, London, Singapore and Sydney.
“International is about 25% of our business – it should be 40% – and we’re starting our in-country recruiting immediately,” said Calvillo.
Although Calvillo said he couldn’t yet get specific on how his company will work together with Cheetah Mobile, he did note that the partnership will accelerate Nanigans’ focus on the China, “which had not been a high priority for us” before.
“Cheetah Mobile participated in the round for strategic reasons,” Calvillo said, rather cryptically. “They’re not a venture firm like the other financial investors in the round.”
Cheetah, a subsidiary of Chinese software giant Kingsoft, seems to be making a habit out of strategic ad tech investments lately.
Known as a utility mobile app developer, Cheetah was in the news just last week after shelling out $58 million to buy French mobile ad tech player MobPartner. Add to that the fact that Lei Jun, CEO of handset make Xiaomi, serves as Cheetah’s chairman, and all evidence points to the fact that Cheetah Mobile is looking to pounce on the mobile ad market.
