News broke last week of our latest investment – a £2m Series A in mobile advertising startup StrikeAd. As the world’s leading mobile demand side platform (or DSP) StrikeAd enables agencies to plan, execute, and measure mobile advertising campaigns at scale and with high efficiency. We spoke with a number of agencies in [...]]]>

News broke last week of our latest investment – a £2m Series A in mobile advertising startup StrikeAd. As the world’s leading mobile demand side platform (or DSP) StrikeAd enables agencies to plan, execute, and measure mobile advertising campaigns at scale and with high efficiency. We spoke with a number of agencies in the run up to this investment and it was amazing how many of them have them have significant budgets to deploy on mobile, but lack the tools to execute the campaigns.

The idea of mobile advertising isn’t new any more and as many of you will know there have already been a couple of significant exits from this market – including DFJ investment Admob which was acquired by Google for $750m in 2009. StrikeAd is different from Admob and the other large mobile advertising businesses because it is not an ad network. The ad network business model is to buy inventory from publishers and sell it onto advertisers at a markup, usually without disclosing the margin they are making. Over the last couple of years on the web publishers and advertisers have started to eschew the ad network business model, preferring to connect directly via ad exchanges. Ad exchanges allow for better targeting and realtime buying which results in more efficient spend for advertisers and higher rates for publishers. This trend is now coming to mobile, and DSPs, of which StrikeAd is the market leader in mobile, provide the sophisticated software and supply connections that advertisers need to target and execute their campaigns in realtime.

So from a market perspective StrikeAd stands to benefit both from the growth in mobile advertising and from the shift within the mobile advertising market from ad networks to exchanges. My favourite stat on the coming growth in mobile advertising came from Mary Meeker’s Internet Trends 2011 presentation last October – in 2010 8% of time spent on media was spent on mobile, but only 0.5% of ad spend was on mobile. Improved devices, larger screens, and above all the growth in m-commerce will drive convergence in those figures.

StrikeAd also has a great team with a long history in AdTech. I’ve known founder and CEO Alex Rahaman for seven years now and in that time he helped grow a UK ad network called Unanimis and sell it to Orange, and also there led the spin out and finance of a very large open source adserver and exchange called OpenX. Alex and his team have been a delight to deal with since he first came to tell me he was setting up a mobile DSP and all through the investment process. Addtionally, Thomas Falk, who could well be Europe’s most successful adtech entrepreneur, provided the angel funding and is an important part of the team.

Finally, a quick word on the product. StrikeAd manages a complicated technical infrastructure that processes huge volumes of data at very high speeds. The software processes over 20bn ad impressions per month, combines them with third party data sources for targeting purposes, bids on the impressions if appropriate and serves ads if the bids win. Total round-trip time from ad impression called to adserved has to be less than 100ms to maintain a high quality experience for the smartphone user. Campaigns are targeted on a wide range of parameters, including demographic data, location, time of day, and device type, and they are optimised for a wide variety of outcomes, including click through, app download, click to call (and even click to call where the call lasts longer than a specified time). All of this is presented to the advertiser (normally via their media buying agency) in an intuitive user interface. In short, this is heavy duty software, and not the sort of thing that can be knocked up by a couple of hackers overnight.

We’re excited by the prospects for this business. Revenue momentum is strong and hopefully StrikeAd will quickly become a substantial company.

As revealed by Mike Butcher on Techcrunch last week DFJ Esprit will be offering a £50,000 convertible loan note to the Grand Prix winner of The Europas Tech Startup Awards.

We are excited to be supporting Mike and the Europas and look forward to welcoming a new company into the portfolio.

The loan [...]]]>

As revealed by Mike Butcher on Techcrunch last week DFJ Esprit will be offering a £50,000 convertible loan note to the Grand Prix winner of The Europas Tech Startup Awards.

We are excited to be supporting Mike and the Europas and look forward to welcoming a new company into the portfolio.

The loan will convert into equity at the startup’s next funding round on the same terms as the new investor (i.e. no discount) and will not be interest bearing. The loan will be ‘plain vanilla’ in all other respects (i.e. no additional rights). The winner will have a week to decide whether to take the loan or not.

The piece is very short but they referenced The Equity Kicker twice.  Without doubt they were interested [...]]]> Yesterday morning I did an interview for Bloomberg TV.  I’ve shared my thoughts on CNBC before, but this was my first time on TV with make up, and that somehow makes it more proper, don’t you think?

The piece is very short but they referenced The Equity Kicker twice.  Without doubt they were interested to have me in the studio because of this blog, and more importantly because you all read it and comment.  Without an audience and participation I would be less interesting.  That’s why I used the pronoun ‘we’ in title to this post.

A couple of weeks back I recorded a Desert Island Discs style interview for UK radio station Jazz FM.  It went out at 6pm last night as part of their Jazz in the City series and it is now available as a stream from their website.  For those that haven’t listened to [...]]]>

A couple of weeks back I recorded a Desert Island Discs style interview for UK radio station Jazz FM.  It went out at 6pm last night as part of their Jazz in the City series and it is now available as a stream from their website.  For those that haven’t listened to Desert Island Discs the format is an hour long wide ranging chat punctuated by six tracks of my choosing.  On Jazz FM they have to be jazz tracks.

David Prever conducts the interview and we have an amusing chat covering my early career, bubbles, Dragon’s Den, and of course why I chose the six tracks.

Last night we announced the sale of Zeus Technology to Riverbed for $140m. This exit is the culmination of a lot of hard work by a lot of people over a long period of time. My involvement with the company dates back to 2004 when I led a recapitalisation of the business [...]]]>

Last night we announced the sale of Zeus Technology to Riverbed for $140m. This exit is the culmination of a lot of hard work by a lot of people over a long period of time. My involvement with the company dates back to 2004 when I led a recapitalisation of the business and there was eight or nine years of trading history before that.

I think we can identify a couple of characteristics of Zeus that contributed heavily to the success of the business in the period I was involved.

Firstly (and most importantly) the product has always been fantastic. We weren’t always selling a lot of it, but with very few exceptions the customers we had were very happy, mostly because the software worked really well. As former Chairman and CEO Paul Brennan used to say ‘it does what it says on the tin’. It was also very easy to install, so we had no headaches with complicated implementation projects or big professional services teams.

Secondly, we kept the business lean until the market was ready for us. Zeus competes with a number of much larger businesses and our unique selling point is that we sell software vs the competition’s hardware. That difference only became important to large numbers of customers when cloud computing took off.

There are many ways to build a successful business. This is the way that worked for Zeus.

It is common to joke that success has many fathers, but in the case of Zeus the list of people who deserve credit is indeed long. Key contributors since 2004 in the role of chairman or CEO were Paul Brennan, Paul di Leo, Michele Fitzpatrick and Jim Darragh. At different points over the last seven years each of them played a critical role in moving the company forward. I also want to thank the key members of the exec team who pushed the business forward to exit over the last couple of years: David Day (CTO), Charles Hobley (CFO), Kosten Metrewelli (Head of Marketing), and Pal Kosten (Head of Sales).

I hope I get the chance to work with all of you again.

Finally, I should mention the founders Adam Twiss and Damian Reeve who wrote the initial Zeus code when they were undergrads at Cambridge and ran the company during its early years. I didn’t get to work with Adam at all and only for a short while with Damian but their contribution was the most important of all (kind of obvious, but needs saying).

UPDATE: Thanks to everyone who has sent a note of congratulations.  It means a lot, even if I don’t reply in person.

I thought it might be fun to offer a ticket as a prize for an Equity Kicker reader [...]]]> Mark Littlewood, the organiser of Money in Mobile forum has kindly offered a free ticket to the reader who can come up with the best question to ask on the day.  He put it like this:

I thought it might be fun to offer a ticket as a prize for an Equity Kicker reader – they are such a sparky bunch.

To win a free guest pass to the Money in Mobile Forum on 14th June. Drop us a note to question@thebln.com by Monday 6th June saying who you are, and the question you would like to ask a speaker – http://moneyinmobile2011.thebln.com/speakers/

The person posing the best question will come to the event as our guest and get to ask the question.

Thanks Mark!

I will be a judge at the Money in Mobile Forum on June 14th.  Mark Littlewood of the BLN always puts on a good show and this one looks to be no different.  The theme of making money out of mobile is an important one and Mark has got a decent line [...]]]>

I will be a judge at the Money in Mobile Forum on June 14th.  Mark Littlewood of the BLN always puts on a good show and this one looks to be no different.  The theme of making money out of mobile is an important one and Mark has got a decent line up of speakers (including my co-author Nicholas Lovell).  There is also a startup competition for companies that fit the following criteria:

• Are privately held
• Have paying customers
• Make money for them
• That’s it

(this is what I will be judging, along with a few other VCs and other notable folk).

The entry process is designed to be quick and easy, and you can apply here.  The winner gets the kudos of being picked as a winner, an iPad, and a free ticket to the event.

If you are a startup that fits the criteria above and are looking to build your network with VCs then applying for this competition would make a lot of sense.  Winning it would be even better