As the ad-tech market rumbles forward, Toronto-based Chango has raised $12-million from its existing investors to drive growth, highlighted by plans to double its workforce and open offices in Chicago, Detroit and London.
Chris Sukornyk, Chango’s founder and CEO, said the financing happened because there is a huge opportunity to establish a bigger foothold in a market fuelled by the demand among advertisers for real-time technology that can them help more effectively reach online consumers.
“There is an enormous opportunity because so much of advertising dollars is becoming programmatic and I think that for many reasons it is going that way,” he said in an interview. “For a marketer, it is ridiculously complex given we live in an era of big data, real-time bidding and hundreds of acronyms We talk the talk in terms of technology but what we have done really well is put a human face on technology.”
Growth Driven by Search Retargeting Service
Chango’s growth has been driven by search retargeting technology. When someone does a search online, Chango anonymously remembers the search term. When that person visits a site that features a particular search term, Chango displays a related ad. All of this is done automatically and in real-time.
“I would say that search retargeting is resonating because it basically hinges on the concept people are familiar with,” Sukornyk said. “People know search works, and what we are doing is taking that data and bridging into another channel, display advertising, by using the relevance and intent of search to make campaigns more relevant.”
What’s interesting about the financing is there are no new investors. Instead, all the existing investors - iNovia, Rho Canada Ventures, Metamorphic Ventures, Mantella Venture Partners and Extreme Venture Partners – took their full allocation.
“Arm Wrestled” With Existing Shareholders
Sukornyk said Chango, which raised $4.25-million in early-2011, could have pursued new investors and possibly received a higher valuation but, in the end, it decided the time and effort involved wasn’t worth it.
“I had two choices,” he said. “I could go out into the market and raise money, or work with my existing investors. There are pros and cons to both. Going out in the market, you might get higher valuations but it will take six months and burn a lot of time. Fortunately, we arm wrestled a little bit internally, and came to a number we could agree on. We saved ourselves six months and we were able to focus on the business.”
More: The New York Times ran an extensive feature recently on the ad-targeting industry.