DanAds helps publishers around the world to sell ads and lower their ad operation costs. Despite a challenging time during the corona pandemic, the technology company is raising 42 million in new capital from, among others, Mellby GÃ¥rd’s CEO Johan Andersson, Hugo Stenbeck, and Storytel billionaire Jonas Sjögren.
The Swedish technology company, DanAds, founded in 2013 by Istvan Beres and Peo Persson, wants to help automate publishers’ manual Ad Ops and Sales process to increase efficiency and reach better earnings from small and medium-size advertisers.
DanAds integrates its white-label self-service ad sales solution, giving advertisers a self-service interface to access the publisher’s inventory. Then DanAds platform handle everything from the order, campaign creation, reports and billing. It’s all automated and DanAds can manage ads in both image, sound, text, and video.
All publishers that license DanAds technology get their own white-label self-service ad sales solution integrated to their ad server, operational systems, and product infrastructure.
The customer list includes large global publishers such as eBay, Hearst Magazines, Bloomberg, SoundCloud, Phillips, and Tripadvisor. Swedish tech company Truecaller use DanAds technology to better manage ad sales in their app with more than 200M active users. In the United States Bloomberg Media and Hearst Magazines stand out among major media houses with hundreds of titles in their portfolio.
“Most of our customers are active in a market that has been hugely affected by the crisis; media investments have fallen dramatically. But since 60-70 days ago, volumes have started to increase again, even though we are not back to the levels that applied before the pandemic “, says CEO Istvan Beres.
According to the founders, DanAds has, in a way, benefited from the corona pandemic, as it accelerates the transition from analog to digital advertising bookings. Their perhaps most significant selling point is that their automation technology saves money for all publishers.
“You could say that the corona pandemic has been a blessing in disguise for us. We have signed several new, significant customer contracts just during the corona pandemic. We have managed to sign the two most significant publishing houses in the UK, and one of the world’s leading travel companies. In times of crisis, of course, publishers want to get as much as possible out of their ad sales, and we have publishers who have been able to reduce their operational costs by up to 85 percent”, says co-founder Peo Persson.
DanAds takes between 1.5 and 5 percent of advertising revenue as its earnings, plus a license fee. In 2019, the company increased its sales by almost 160 percent to 18 million, according to a recent financial statement. In the same year, DanAds recorded a loss of just under 21 million.
“We are very happy with last year and exceeded our forecast of achieving a growth of 150 percent”, says Istvan Beres.
How will the corona pandemic affect your own full-year sales?
“We believe that we will increase revenue by at least 150 percent again. We can potentially become profitable monthly from October onwards”, says Istvan Beres.
DanAds previously had hopes of raising around 100 million in venture capital during the first half of 2020. But instead, DanAds has chosen to raise 42 million through a convertible loan, where investors can exchange their claim for shares, from the ownership circle. The reason is partly that the company did not want to lower its valuation of approximately 150 million, which was achieved last year, according to CEO Istvan Beres.
“The convertible was oversubscribed, we had actually intended to bring in 30 million. It’s great that there was such a significant interest – and we are happy to be able to leverage the experience from skilled entrepreneurs when we are to cement our position even further in the US and the UK “, he says.
The idea is then to raise an additional 60-70 million of capital during the autumn – then to a valuation of around 300 million.
Several new investors have already been added. Mellby GÃ¥rd’s CEO Johan Andersson, Hugo Stenbeck, and Jonas Sjögren, who have become a billionaire from his holdings in the company Storytel.
However, most of the convertible loan comes from existing owners. The list of owners includes, for example, state-owned Almi Invest, the venture capital company Wellstreet, Paradox founder Fredrik Wester and Eirik Winter from BNP Paribas. The former Swedish Minister of Finance, Anders Borg, is another partner who is now expanding his involvement in the company.
“So far, there is no technology platform that competes with DanAds, they have actually created this market on their own. Tech giants like Facebook and Google are becoming increasingly dominant in the advertising market. Many customers, therefore, think DanAds is a better alternative, especially as they get full control of their own data”, says Anders Borg.
DanAds has previously stated that the only competition in the market is big international publishers building their own ad systems, which, for example, Amazon and Spotify, have chosen to do.
The company aims to open two new offices in the UK and the US shortly. Before the end of 2020, DanAds will have around 100 employees, a doubling since last year.
“So far, we have aimed to reach the largest publishers and media houses, but now we want to increase our volumes by attracting smaller independent publishers. We have a robust future order intake”, says Peo Persson.
All figures are in Swedish SEK.
Original article in Swedish by Johannes Karlsson at Di Digital:
Hugo Stenbeck och Storytelmiljardär kliver in i svenskt teknikbolag
Photo: Josefine Stenersen, Di
