In a tight capital market, Adenyo's recent $26.9-million financing stands out as much for having happened at all as it does for the company's technology.
The Toronto-based mobile-marketing company, which was formerly known as Silverback Media and has about 95 employees, helps companies advertise their products on cellphones. It's a broad-based approach that targets the masses, serving up content-rich interactive ads on devices such as BlackBerries and iPhones.
Chief executive officer Tyler Nelson, who was formerly in charge of marketing and business development at QNX Software Systems and vice-president of global business development at Research In Motion, explains why his company is set to change the way advertisers reach their consumers.
At the most basic level, what does this company do?
We have technology that allows businesses, publishers and agencies to design, create and manage mobile marketing campaigns. What we've done is acknowledge that mobile marketing is about unlocking transactions in the mobile economy. Our customers can use a set of tools, it's a pretty non-tech interface, to create campaigns and target customers. They can do everything from insert Web pages, make mobile rich experiences for Web phones, and deploy and manage advertisers from third parties on their mobile pages.
How hard was it to raise money?
Well it was interesting because it wasn't venture money, it was from institutional and private investors who have been long-time supporters of the business. We've already proven our thesis - we are profitable and have revenue in excess of $20-million - so it was relatively easy for us. I'd hate to be in the Canadian marketplace right now and not have solved a problem, because it is so hard to unlock money at this point.
How is a mobile marketing campaign different than a traditional campaign?
A novice user needs to understand that marketing mobile is unlike other channels. The target audience are already consumers you have a relationship with, with your brand or service so it's an opt-in channel. You can't push over-the-top content at them, there are privacy concerns to take into account. You are trying to cross-sell and up-sell, making extra money in the final mile by allowing consumers to acquire a service or a product in real time.
What do your customers do with the software?
That can range. Air Canada turned to us to create a content delivery platform that could handle everything from flight status to scheduling. It's not all advertising, per se, it's also not just about helping people check their bags. It's about extending that last mile, getting them to make transactions based on the extra content.
What is the target market?
Globally, it's Fortune 1000 companies and their brands, though increasingly we're seeing very strong pickup and adoption by what I would call medium and even smaller businesses.
What will you do with the money?
It's going to fund more aggressive mergers and acquisition strategies.
We've done a series of acquisitions and I believe it's the right time to do more, so we'll be aggressive on that front. It will also allow us to grow our sales and marketing teams. We are operating from a position of strength now - it was a crowded space with early stage companies backed by venture capital early on, but more often than not they failed to make it on their own or prove that they had a larger business case to offer.
What advice do you have for up-and-coming companies?
There are no one-hit wonders any more, so don't chase that Google dream or try to solve world hunger. They need to look around the industry that they have chosen to participate in and quickly find partnerships that will turn into larger business opportunities. Then they need to focus on the things that really matter to investors.
Everyone wants to invest in widgits at their early market stage, but it's more important to get at the underlying blocks of solving a problem. What you need to be doing is solving a business problem for a customer - then the rest becomes relatively easy.
What's the biggest challenge right now?
Things are pretty good - we're five years old and never had a down year in terms of growing revenue. We've done that because we are solving problems for our customers and 90 per cent of them come back after they have done business with us. That's because we focus on our core competencies. But what's important and challenging now is that we're at a point in our development where we are aggressively pursuing the best and brightest minds in our industry. The most productive way we've found so far is through word of mouth and personal networks - as a rule we won't use third-party agencies because we feel if we lure them from another company we are starting them off on the wrong path.
We need to be able to stand on our own two feet as a company and prove we are a good place to be.