Venture capital is running dry right now. But the ecosystem of ad tech investorpreneurs is going strong.
A group of martech funds and individual angel investors backed lockr, an online identity management company with B2B and consumer-facing products, to the tune of $2.5 million, the company announced on Monday. Although, the startup faces big challenges, including growing a consumer email customer base and charging businesses and users for services.
Institutional backers include Mozilla’s VC arm, Mozilla Ventures, and Heracles Capital, which is run by Eric Seufert of Mobile Dev Memo.
Lockr’s individual angel investors – more than 20 in the round – include Adrian Bolosan, who heads media and publisher accounts for Snowflake, and Sudheer Gopalam, head of customer engineering at Google Cloud. Leaders from Amazon, Oracle, Verisk and AdRoll are also involved.
How it works
Lockr operates two distinct businesses, which are complementary but not directly supportive of one another.
One is lockrMail, a consumer-facing email management service that plugs into a person’s email accounts, including personal, business and those other ones you use for sign-ups and never think about again. The service comes with features to filter messages and set preferences.
And then there’s lockr’s B2B business, which works with publishers and platforms on email identity verification.
As more consumer tech companies withhold email data, said lockr founder and CEO Keith Petri, publishers and platforms are losing the ability to identify people who come to their sites and apps.
Apple has Hide My Email. DuckDuckGo offers its own email obfuscation, as does the Brave browser and search engine. Even eyeo, which operates ad blockers and channels advertisers through the Acceptable Ads program, effectively does the same because it controls what those users see and what data they share.
Apple previously routed Hide My Email dummy accounts through a single domain at PrivateRelay.AppleID.com. Because that wasn’t difficult for services like lockr to spot, Apple now routes through iCloud accounts, which are easier to camouflage as real.
True iCloud accounts are distinguishable from Apple-generated ones, Petri said, but there are also other ways to uncover whether an email is vapor or actively in use. One way is to ping a mailbox in real time, which will show if the mailbox doesn’t exist, such as when an individual uses a fake address.
In the same way some publishers prompt users to disable their ad-blockers or consent to see ads in order to visit a site, “Identity lockr,” the company’s identity verification product, gives publishers a way to identify if someone is using a machine-generated or fake email account – and then to ask for the real thing.
But while lockr’s two businesses may appear directly connected, Identity lockr isn’t fed by the consumer email product. The lockrMail accounts are never shared on the commercial side, Petri said, not even in an anonymized or aggregated way.
What about making money?
For now, lockr does not monetize its consumer or B2B products.
That makes sense for the free consumer email service. It’s hard enough to get new users when default options like Gmail and Apple Mail have conditioned people to think of personal email accounts as something they don’t need to pay for.
Eventually, though, Petri said he envisions a freemium model whereby most people use a free version and some pay for security, privacy, SMS or payment management services.
There are also potential affiliate opportunities. A lockrMail user might set preferences to receive updates on Nike running shoes or opt to hear when a particular brand is on sale.
But lockr’s email and ID verification product is the sort of thing that other vendors are charging for. It is a “very robust infrastructure investment” – as in, it costs a lot of bucks – to ping email account mailboxes in real time to identify potential fakes, Petri noted.
So, why not charge for it?
The answer is the rationale behind the funding round, Petri said.
“With early-stage venture capital and scaling a business, unfortunately, sometimes it’s not as straightforward as you want,” he said.
Where’s the money going?
With no other cash flowing in the near-term, the $2.5 million pre-seed round will allow lockr to grow its six-person team, which today includes head of operations Jennifer Hagan, a former biz dev leader at OpenX and Teads.
Petri said lockr is looking for engineering people to build consumer features and a sales and partnership person to add publishers and platforms like Snowflake and Oracle.
And then there’s consumer marketing and customer acquisition, he said, which is an entirely new skill.
Companies and executives with martech and ad tech roots are hesitant to create a consumer-facing business, Petri said. It’s more difficult and less reliable.
“A lot of companies are playing whack-a-mole,” he said. “They’re not taking the opportunity by the horns and making the most of it, which is by truly incorporating the consumer.”
