FastPay, a startup offering credit to digital media companies, is announcing that it has raised $15 million in additional equity funding.
That description might not sound particularly sexy, but FastPay seems to be tackling a common problem for companies that serve as middlemen between online publishers and advertisers (such as ad agencies, demand side platforms, supply side platforms, ad exchanges, and so on) — you’re in a tough spot if you’re still waiting on money from advertisers when a publisher needs you to pay up.
For example, David Segura, then-CEO of video ad company Giant Media, has told me that Giant’s publishers expected to be paid 30 days after a campaign, while its advertisers took 60 days to pay. He said that without credit from FastPay, Giant would have had to raise venture funding just to have the cash to deal with those issues. (Since I spoke to Segura two years ago, Giant Media was acquired by Adknowledge.)
FastPay says it has now originated nearly $500 million in loans to digital media companies and has grown its team to more than 40 people.
The new funding comes from Oak HC/FT (a growth fund from Oak Investment Partners focused on health care and financial services) and brings FastPay’s total equity funding to $19 million. A significant amount of FastPay’s financing has come in the form of debt, which makes sense — in fact, given the FastPay model, I asked founder and CEO Jed Simon (pictured above) via email if he felt conflicted about raising so much equity funding.
“We don’t feel there is a conflict because we are not against raising equity, we simply feel that many young, rapidly growing businesses find themselves in a position where they are forced to raise funding too early and for the wrong reasons,” he said. “It is important that entrepreneurs know all their financing options; in fact, we often work alongside VCs.”