Five Early-Stage Ad Tech Startups That Aren’t Focused On Ad Tech

Ad tech isn’t the investment free-for-all it used to be, but that doesn’t mean the category is dead.

True, some types of ad tech have lost their luster. In April, the ad tech investment firm Luma Partners, for the first time since it started doing Lumascapes five years ago, registered fewer new DSPs, SSPs and DMPs than category exits.

Yet, many young entrepreneurs who cut their teeth in the world of online media are using their ad tech know-how to develop solutions applicable to other areas of the digital landscape.

Will they be successful? It’s too early to tell. But they’ve all got the backing of industry entrepreneurs, who have created a strong angel investor ecosystem, funneling bite-size investments (typically $25,000-$75,000) to founders in their own network.

Some of the categories attracting ad tech angels include mobile data management, computer vision and video-focused innovation, tracking closely to the innovation budgets on offer from brands and agencies.

AdExchanger examined five seed-stage startups looking to hammer out the next ad tech-related growth categories.

When was it founded and how much has it raised?

Narrative I/O was founded last year and raised its first funding, a seed-stage round totaling $2.25 million, in April. The company has eight full-time employees.

What does it do?

Nick Jordan, founder and CEO, described Narrative as a “data commercialization platform.” In short, the platform ingests data from across a business’s operations and provides technology and a marketplace to make that data transactable.

How many clients does it have and who are they?

Narrative has no public clients but is in beta with a range of customers with sophisticated data science teams, Jordan said.

Sellers on the platform include publishers and mobile developers packaging their own behavioral data sets and companies with cross-device identity assets. Buyers could be brand and agency data science teams, attribution firms or non-marketing use cases like a hedge fund buying location data to supplement brick-and-mortar research.

Who’s investing?

Narrative has raised money from three institutional venture capital firms and 10-15 ad tech angel investors, which is an increasingly popular way to secure early traction.

VC firms tend to provide more operational support and log way more hours developing the business, Jordan said. “But there’s a signaling aspect to it when you can walk into a sales meeting and give the name of your investors, and it tells the person on the other side of the table you’re serious and know how to put together a platform.”

Narrative’s cast of angels features some of Jordan’s former co-workers, like former Tapad executive sales VP Jim Clark and other members of the Tapad executive team, where Jordan was senior VP of product and strategy. There are also industry vets with deep ad tech portfolios and apposite business perspectives, like Unacast CRO Chris Cunningham, who founded the startup fund C2 Ventures, and Jennifer Lum, co-founder of the cross-device DSP Adelphic, which sold to Time Inc. earlier this year.

When was it founded and how much has it raised?

Spaceback was founded in April this year, but hasn’t raised a full seed round yet and has five full-time employees. With about $350,000 in angel support, it hopes to build a platform where people can follow certain brands or topics; Related content will track those brands or topics in ad inventory across the web.

What does it do?

The product is in development, but the goal will be to set up brands or interest categories people can follow – similar to a relevancy engine like StumbleUpon, except based on cookies and not a browser extension.

So if a consumer is interested in the NBA, they would opt in to see images related to basketball instead of the display ad content they would normally see.

The idea is to create an “Instagram around the web, where you can follow the things you want,” said co-founder and CEO Casey Saran.

“Brands and content creators are investing in media and brand on social platforms,” he said, “but aren’t applying that same investment or relationship strategy elsewhere on the web.”

Spaceback’s model is hypothetical for now.

How many clients does it have and who are they?

Spaceback has no public clients, as the company is yet to release a live product on the market.

Who’s investing?

Saran has been through three ad tech exits (Weather Underground to the Weather Channel, Admeld to Google and iSocket to Rubicon Project), and exits tend to act as hubs for angel interest. Among the startup’s stakeholders are Alan Steremberg, former president of Weather Underground and now a startup consultant, Admeld founder and former CEO Ben Barokas and former Rubicon Project CTO Neil Richter.

MediaMath CEO Joe Zawadzki is an investor and Centro CEO Shawn Riegsecker is an adviser, and Spaceback integrates both bidders for its service.

“First and foremost, I love to bet on members of my team,” said Barokas, who’s invested in 20 to 30 startups since he sold Admeld six years ago. Of those, four or five have exited, which could mean an acquisition or successfully propelling a startup to later rounds when angel shares can be bought back by VCs. About the same number of startups in Barokas’ portfolio have gone belly up.

When was it founded and how much has it raised?

Parsec, founded in 2014, is profitable – a rare state for seed-stage companies – and has raised almost $3 million in two seed rounds from a range of ad tech and media angel investors. The startup has grown from 19 people a year ago to 35 employees today.

What does it do?

Parsec, which has the most to do with media buying of the listed startups, is a platform that buys CPM-based inventory from publishers to resell on a cost-per-second basis.

The model is different than arbitraged ad networks, which buy inventory to resell at a premium, because “what we’re actually doing is arbitraging the metric and assuming the risk in that,” said founder and CEO Marc Guldimann.

The numbers tend to work out in the platform’s favor, Guldimann said, “because time is a leagues-better proxy for attention than buying impressions and our model creates an economic incentive for quality ads.”

How many clients does it have and who are they?

Parsec sources supply from Rolling Stone, USA Today and Scripps, among other publishers. It hosts a marketplace where DSPs and buyers can bid on Parsec’s resold inventory. Brand buyers with whom the company has worked include Jaguar, Microsoft and ABC.

Who’s investing?

The company’s original set of investors included Brett Wilson, the founder of TubeMogul who sold his video DSP to Adobe, and WGI Group, the early-stage investment firm helmed by Jonah Goodhart, Noah Goodhart and Michael Walrath, the three co-founders of both Right Media and Moat.

“As an entrepreneur, it’s about figuring out how to use your advisers and angel investors in a way that’s easy for them and beneficial for you,” Guldimann said.

The flip side to bringing on a host of industry vets is that “people with successful exits can have a survivorship bias,” he said. “A lot of people in that position encourage me to get out of the media business.”

Sometimes Parsec will identify an executive with specific knowledge or experience it wants on the team, and will approach the person with adviser shares. Some of those advisers come from agencies, like Anomaly founder Ernest Lupinacci and Adam Shlachter, president of global innovation at the Publicis agency PMX.

Advisers also have deep publisher roots, like Vox CMO Lindsay Nelson, Purch VP of yield and revenue optimization Mike Hannon and Financial Times advertising VP Brendan Spain.

Parsec’s cost-per-second model is compelling for publishers, Guldimann said, because “they make more money when the reader has a better experience and stays longer with their content.”

When was it founded and how much has it raised?

Two Cornell computer science master’s students founded the startup last year after working on computer vision technology to insert images organically into video. So far, it has raised almost $1 million from a mix of VCs, Cornell University and angel investors, and it has four employees.

What does it do?

The startup processes video and understands what objects are present, what words are said and when there’s open space in the scene where a brand image or message could be inserted.

One product enables consumer items to be tagged within a video. In other words, a woman wearing a coat in a video could have her coat turned into a link to a product page or to display more product details. At the moment, this work involves augmenting publisher-owned video content on a publisher’s property, since scaled video platforms like YouTube and Facebook don’t enable the in-video feature, according to co-founder and CEO Bill Marino.

Uru also offers brand-safety and content-recognition APIs, which buyers or exchanges can white label as a way to vet video content being advertised against.

The company is still trying to establish the right metrics for the service, Marino said. A New York University study showed better brand recall for the augmented in-video branding compared to display, Marino said, although the branded images Uru serves into videos can, naturally, seem a better fit as video than display.

How many clients does it have and who are they?

Uru is in testing with 12 clients, which are a mix of OTT developers and media companies with their own video investments.

Moving forward, social influencers and content creators like the YouTube community could tap Uru to monetize their video content – similar to how Instagram now allows brands to add product-listing details to tagged items in photos (but not videos) on the platform.

Who’s investing?

Angel investors include Unacast’s Cunningham and Eric Franchi, who left Undertone a couple of months ago to pursue startup investments.

“I feel like a boxer and they’re the coaches in my corner,” Marino said about the angel advisers. “They help with introductions and with the messaging so that it’s tied to real marketer pain points.”

“I was attracted to Uru before I really had a sense for how computer vision can be applied,” Franchi said.

“A wave of talent is coming into the industry from universities and data science groups and they’re going toward mobile, video and machine learning applications,” he added. “We won’t get the next wave of DSPs, but those are categories where a startup could still really move the needle.”

When was it founded and how much has it raised?

Popwallet is a two-year-old startup and has raised $1.3 million, mostly from angel investors. Head count is at 9 full-time employees.

What does it do?

It applies paid media and performance dollars to mobile wallets and mobile coupons.

“If you’re a detergent, nobody’s downloading your detergent app,” said founder and CEO Elias Guerra. “But we saw this mobile wallet space as a way to exist between content and commerce.”

So, for instance, if a user is offered a discount on a CPG item, instead of printing or hoping to recall the deal later in a store, Popwallet creates a coupon that can be clicked-to-save into a mobile wallet like Apple Pay or Android Pay, Guerra said.

On top of the benefit of connecting a potential conversion directly to a payment system, saving discounts also generates stronger data and marketing, like location data pings when the item is saved to the wallet and push notifications the brand will be able to follow up with.

How many clients does it have and who are they?

Popwallet has 9 employees and works with product brands like L’Oreal, Unilever and Land O’Lakes. The primary revenue source is CPGs “shifting these massive trade promotion budgets to digital,” Guerra said. Smartphone-based shopper marketing – the term traditionally reserved for in-store promotions like aisle caps – is allowing new ad tech companies into CPG trade marketing budgets, which can exceed the total amount spent on digital media.

“We’re going to them and saying we can deliver real ROI, and we’re competing on that side with corrugated cardboard display cut-outs,” he said.

Who’s investing?

Angel investors include AdRoll President Toby Gabriner, former Dstillery CMO Louise Doorn and the founding CRO at BrightRoll, Charles Whittingham.

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