Location As Hot Investment: Verve Completes $30 Million Financing
Amid a hiring spree, the mobile ad platform's debt financing package from Silicon Valley Bank will be used for acquisitions.
A month after a trio of location-based ad platforms raised a collective $30-plus million from investors, mobile ad platform Verve Mobile has closed a $30 million debt-financing with Silicon Valley Bank.
Unlike a direct venture capital investment, a debt-financing gives Verve’s executives a bit more flexibility and lets existing shareholders maintain their control. New York-based Verve has been rapidly and regularly adding executives and products involving the use of online-to-offline location data since CEO Nada Stirratt took on the role a little over a year ago. The company has also been extending operations in Europe.
While Verve claims to have grown “50 percent over the past four years,” the continued work on so many various fronts requires immediate capital. And that’s where Silicon Valley Bank’s debt comes in.
“Silicon Valley Bank has played a pivotal role in Verve’s expansion,” said Stirratt, in a statement. “Verve is a pioneer in the mobile location business, and we have proven our ability to build a rapid-growth, profitable platform with industry-leading margins. This additional investment from SVB allows us to make strategic data and technology acquisitions to complement our distinctive capabilities in the US and abroad.”
On the product front, Verve opened its SMB-focused self-serve platform in February in its bid to turn the one-time mobile ad network into a “one-stop-stop” for location-based ad targeting and analytics. A few weeks ago, it launched Verve Velocity, which is billed as the company’s “enhanced mobile location platform” designed to connect enterprise clients to the consumers at the local level in real-time.
While there has been talk of a new wariness on the part of investors to pour capital into tech startups, the location marketing sector has appeared to have little trouble convincing backers to part with their money.
Funding of location-based marketing providers is being driven by a number of factors.
Primarily, app usage by on-the-go consumers is becoming more mainstream. People within all key demographics use their phones to connect with each other through Facebook and search for products and places via Google. And that all creates a greater opportunity to access data. And the idea of location patterns to develop clear profiles that show where people spend their time and their money represents a direct line for one-to-one marketing and better understanding of how to target the right shopper at the right time.
For Verve, as the competition among location-based marketing services intensifies, it is racing to stay ahead as the 11-year-old company continues to broaden its mobile ad network offerings into a fuller programmatic platform provider.
Extensive hiring has been a part of that process. As Verve looks to the latter half of 2016, acquisitions will likely play a bigger role. Early in Stirratt’s tenure as CEO, the company made one notable purchase when it acquired mobile payments processor Fosbury, which has become a major player in the indoor marketing space.
“We know that the mobile landscape will evolve, and Verve plans to be at the forefront of delivering greater advertising performance for our clients,” said Stirratt. “We are doubling the size of our product and engineering team and actively pursuing impressive additions to our portfolio.”