The rise of smartphones and app usage have had a big impact on the growth of mobile advertising, which is projected to see spend of $64 billion this year and grow to $158 billion in 2018, according to eMarketer. With that has come the rise of mobile ad tech — systems that advertisers, ad networks, and others in the mobile ecosystem hope will help improve the effectiveness of the medium.
And that’s having a knock-on effect for ad-tech funding. In one of the latest developments, AppsFlyer, a startup that partners with the likes of Facebook, Twitter and Google to measure the effectiveness of in-app mobile ads, has raised $20 million in a Series B round. As a mark of the attention that mobile ad tech is getting from VCs today, this round of funding comes less than a year after the Israel-based company raised a Series A of $7 million.
“We realised very quickly after the A Round that we could create leadership in this segment,” Oren Kaniel, AppsFlyer’s CEO and co-founder says. “We decided to go for a bigger round to allow us to do that even faster.”
The funding will be used for R&D, new measurement tools, and international growth, with new offices opening in San Francisco, Beijing and Tel Aviv.
This latest round was led by Fidelity Growth Partners Europe (FGPE), the VC arm of Fidelity Worldwide Investment. Existing investors Magma Venture Partners and Pitango Venture Capital also participated. The company has now raised $28 million in all.
The area of ad tech that AppsFlyer focuses on, mobile ad measurement, effectively uses a set of algorithms that integrates with ad networks (some 800 in all, the company says) and app publishers to track actions that users take in the time after an ad is run, in AppFlyer’s case, 30 days. The “Flyer” in its name may partly be related to that piggy-backing nature of the tracking.
It uses these to demonstrate to advertisers and others in the ecosystem how well an ad is performing by way of a dashboard. Brands can then, in turn, use the dashboard to launch and measure subsequent campaigns. It also positions itself as a one-stop shop, with integrations with other analytics services like Mixpanel, Swrve, Game Analytics, and deltaDNA.
While the most standard action to date for measurement firms has been “clicks”, AppsFlyer is using its position of sitting inside apps to track other kinds of actions — such as purchases. Kaniel tells me that his company’s mission in fact is to move away the click as much as possible.
“Cost per click is a dead metric,” he says flatly.
So far the pitch and the product have been doing well. Kaniel says that the company is “somewhere between breakeven and profitable” depending on how much it is investing in growth. He claims that some 4,000 advertisers are using AppsFlyer to measure $1 billion in ad spend, and that its SDK has been installed more than 4 billion times and is on 9 out of every 10 smartphone devices (by way of the apps that use it, with 2 billion app installs tracked by the company in 2014).
As part of this round, Fidelity’s Gaurav Tuli is joining AppsFlyer’s board of directors.