Performance Horizon revealed Wednesday it has raised $15.4 million in Series C funding. The partner marketing platform helps large global corporations manage all their affiliate relationships in one place.
The company plans to use the funds to double its workforce from 120 to 240 over the next year. Sixty percent of the new hires will go to sales and marketing, a key reason for raising funds. The rest will go to product.
Performance Horizon also has its eye on M&A. It might acquire a smaller company in the space with a great engineering team but less traction in the market, for example, said CEO Malcolm Cowley.
With its sales and marketing army, the company will expand its global presence. Cowley moved from the UK to San Francisco 18 months ago to build out the US business. Japan and Europe are also key areas of growth. Within key affiliate verticals like travel, commerce and finance verticals, it wants to add depth to client lists.
The investors for the C round all invested in earlier rounds, including Greycroft, Mithril and DN Capital. While much has been said about the difficulties of raising money in today’s ad tech market, Cowley said the investors have a long-term view and increased their investment because of Performance Horizon’s strong financials.
Revenue grew almost 100% year over year. Gross margins top 90%. Revenue is in the eight-figure range, and the company expects to be profitable early next year.
And in a market bullish on software as a service, Performance Horizon uses a hybrid SaaS-performance model. Brands pay a monthly fee and payouts based on performance. And like Salesforce, Performance Horizon created APIs that allow for flexible use of its platform.
Performance Horizon hopes to capitalize on growth in the affiliate marketing space. Cowley noted the affiliate marketing industry has grown from $10 billion market two years ago to a $20 billion one because of “shadow affiliate” relationships.
For example, a partnership between a travel search engine like Kayak and a hotel or airline is often managed by the brand’s meta-search team, not the affiliate team. But because those relationships are held to similar performance metrics, brands benefit when they add them into a platform like Performance Horizon.
“They still need a system globally to connect, manage and provide the payment mechanisms,” Cowley said.
Despite its growth, the affiliate marketing space tends to be quieter and less hyped than display advertising and programmatic. Cowley said that’s a case of underestimation. His company has great insight into the end of the customer journey, he claimed, which will become even more valuable as the industry ties top-of-funnel marketing to conversions.
“We might be the dark horse in that race,” Cowley said. “We deal in things being bought and shipped. We have a huge global database of information on enterprises we could connect to provide that view.”
Performance Horizon has raised a total of $32 million. It raised its last round, a $10 million Series B, in September 2014.
