Adlive Revenue, Valuation & Funding (2024)

hello everyone my guest today is ben benjalone he is the founder of adlib technology the publisher's revenue monetization app he's a true digital native with financial markets background started his profession a professional career as a sales trader for lehman brothers in london before moving to dubai as an investment advisor and worked on a few tech deals where he had first contact with the digital world ben you ready to take us to the top yeah probably a good thing you got out of lehman huh so uh yeah i went out leaving a year before they went bankrupt and uh my manager had uh i thought something was not going going right and um you know what they felt chapter 11 of my birthday that was kind that's funny so how did you know you wanted to dubai what was in dubai uh actually we had an offer from an investment firm that was operating from dubai and the managing director just took the whole team with him okay interesting so is the case of ad live i mean was this a deal you were working on that fell through and then you just bought it yourself or no no no no no nothing to do basically the idea from ad life came to me from uh my experience with financial markets uh and more precisely is when i saw how a bloomberg terminal was doing amazing things to connect people and allow them to execute your transaction at a very light scale and um you know i just wanted to take that uh that vision to a different uh sector and different market so okay and this is the idea walk me through the company what's the company doing how do you make money so basically what we do is that we offer an app that helps publisher better monetize their revenue and what we offer is just a sas license so we don't take any commission on the media sales which is uh what every other company on the market is doing so we're a pure sas company that helps publisher make more money on their advertising and this is i mean specifically this is kind of header bidding optimization correct yeah this is what we started by do doing because ultimately the goal for ad lab is to build um a single platform that brings together media buyers and sellers uh but we had to to get to the market from one specific point of entry and um the reasoning behind starting with heather everything is that we wanted to solve publishers number one problem and their number one problem was monetization and there was heather reading opportunity and uh we just jumped on it that's great so um walk me through the sas model who are you charging the buyer or the seller only the seller we focus on publishers so every time there's a transaction we check with the volume and we charge a license fee based on the volume because this is where our costs are coming from but either they sell it a hundred dollar or five dollar unit which is the cpm cost per million we charge the same thing yeah okay interesting so what is the average seller paying you per month for your technology basically we have uh different uh client segment but on average is three thousand dollars a year okay three thousand a year okay great and then put this on a timeline for me when did you launch the company what year we we started company um in morocco uh where a country where i'm from and we started in 2015 and we privated because we were addressing first uh the agencies on a specific model that was uh the let's say the automated guarantee so we allowed agencies to buy direct inventory on publishers websites and when we wanted it was doing quite well and uh in morocco and north africa and when we wanted to to go to european markets and international markets we found that it was much easier and there were better business opportunity addressing it from the sell side on publishers and this is why we pivoted to header bidding and we moved to paris in 2017 and we're in station f which is the largest i think better startup in computer in europe you know i've interviewed i've interviewed you guys must be talking about me because i've interviewed a couple people from station f now at this point oh really i don't know if you've met any i'll have to go look in my notes and see but there it's come up at least four or five other times so that's that's great oh amazing yeah okay so so uh 2015 launch how many customers are yet not today now we're around we're we i think we reached 100 customers on last november and that we're increasing significantly and uh yeah that's why we are so how many today are 100 in november but how many 140 150 something around that 140. now can i take 140 times 3 000 acv i mean you're doing 35 grand a month yep and what were you doing exactly a year ago uh we were a year ago we were building the product okay so pre-revenue here we go yeah we're beta testing the product with a bunch of uh publishers that were helping to drive the right features and how did you get your first kind of 10 customers signed up on the platform the first type of the direct sales outreach which we don't do we quite won't do anymore uh very very low uh return investment and very very low conversion rates because the attack is a very crowded market and publishers get hundreds of emails a day my i can help you make more money bust your revenue i'm the best uh ad network in the place and we have a totally different strategy we focus on content and inbound marketing and this is where our even on your first even on your first 10 customers no no no i said those first 10 customers okay let me i want to dive deep on those though first before we move on so when you say direct sales you knew these people based off your m a work at lehman or like tell me specifically how you landed the first customer no the first customers were just some some people that we reached out to base but sure it's based on our crowdfunding how did you know to reach out to them we we started first we know the market okay we started with the french market so we this is our target we targeted the first french market because there was a big business opportunity there was a very low adoption rate of header bidding so our value proposition was huge for these publishers so what did you got to be specific with me here so french market but where you went to linkedin and targeted people what'd you search for specifically how did you find these people we we know the market so we we reached out for direct sales emails cold calls to to the to those people okay how did you get their phone number uh we uh we know how to get phone numbers well teach us that's why you're on the podcast okay so there are a few apps that allow you to get some phone numbers okay name one or two of them loose how do you spell it l l-o-l-u-s-h-a why do you say it so coily is it like illegal or something it's not illegal at all it's public why are you why are you why are you smiling like that when you say it because because those are some some our tricks you know we we're our growth hacking tricks well yeah again that's why i have you on the show okay so yeah and what kind of title were you targeting back then what person like what was their title at the company um revenue manager programmatic manager so digital sales manager so those are the the people we reach out to okay interesting and they were doing like traditional means and you said switch over to us to manage your ad spend or get more ads yeah or or they were doing something that was quite similar to our tech with like previous generation and they were paying very high commissions to the people who were managing that for them okay got it and we don't charge commissions so it's totally transparent yep that's great so how did you get the sellers though to sign up when you had no buyers yet you have a chicken and egg problem no we didn't on heather beating this is why we opted for heather bidding because there's no chicken egg we basically we connect to uh what we call ssps with our demon partner so they bring their demand and because we don't charge commissions they're more than happy to integrate with us because we had the technical bandwidth to do all the integration at our level with no work no efforts on their side so this is how we connect to them and those are connected to the buyers i see interesting okay so so this is the supply chain talk to me about how you've capitalized the business are you bootstrapped or have you raised uh we i bootstrapped until we got profitable because i managed costs very carefully and then we raised yeah okay so how much have you raised a date 300k okay 300 000 bucks from french investors or in the us yeah from french investors yeah okay and and what's the team size today today we're 17 people one seven yeah one seven all there in france no france morocco and russia france morocco and russia okay very good and i assume obviously now you're burning capital because you're investing is that right yeah we we develop more product but we we're targeting to be profitable again by march april april how aggressive are you being like how much 2019 how much are you burning today like 10 20 grand a month 20 grand 20 grand okay and where's most the spend going head count or sales product product yeah product how many of the 17 are engineers uh we have uh engineers working on the product we have eight people and then we have four people working on integrations and technical support interesting interesting yeah okay what about other economics so churn's critical in a sas company what's your turn today yeah we we we are we have a long-term strategy so now our our return is very low we're really it's ridiculous like those are exceptions like how low uh people people it's very low like we hardly lose customers this is this is a this is a major rule because for the moment because basically what we do today is that we charge a very low rates compared to all the value that we bring to the customers and the reason we're doing that is because we're trying to build a network and we monetize more on premium features and premium features will will come very later down the road so we need to keep those customers the churn is the key metric we're looking at so we we're keeping it very low those are exceptions i reach out directly to customers who try to churn or something like that ben what's the number there are we talking two percent revenue churn five percent what is it it's like it's like less than two percent annually or monthly monthly okay two percent monthly revit less than two percent monthly revenue churn and when people do churn why are they churning they turn because sometimes we don't have the the right feature for them because we're just still building up the features some publishers they have some kind of very tricky setups on their on their uh on their website and uh sometimes they're expecting us to deliver a specific feature that matches their specific need and sometimes we do sometimes we don't okay interesting and the uh when you're looking at these customers and you say you're getting you're giving them the most value for what they're paying they're paying 3000 bucks in acb but if you look at the past 12 months how much actually ad spend has been processed through your platform sorry i didn't hear how much ad spend has been processed through your platform over the past 12 months uh you can a few million dollars like four to five okay so five five million bucks right so so you can do the math right five million bucks and then divide by the 35 000 times 12 that year that you're charging i mean that's essentially what you'd compare to like the ad tax right so that's like what is that that's 12 percent it's 12 percent no no it's much less than that no no it's 12. that's what it is it's 12 no because the the question is that those people they didn't start paying from the right they from and the figure i'm giving you is the last figure so we though those numbers were trafficking through our platform before we were making that money so to today if you compare our cost you bring our costs to the revenue we're talking less than four percent okay let me ask a different question in monthly today how much revenue is going how many how much ad spend going through your platform it depends between december and january there's a huge difference there's a big volatility so to answer your question and if you want the real metric and how much do we cost to the publisher that uses us compared to the ad to the attack tax the attack tax can go up to 40 45 for the long term publishers for if they work with us they pay less than five percent yeah but i want the actual number so i can calculate it myself right that's what i'm trying to get at so if you told me five million over the past 12 months i i give you i mean i wouldn't calculate it that way so how how how we calculate it is that you see the the average number we call that the cpm the cost per million and the average cpm in europe is around one euro and we charge less than five cents cpm so this is how it comes okay yeah but again if you've processed five million in ad spend over the past 12 months and your run rate right now is 420 grand 35 grand a month that's 12 why why would that math not be accurate because it hasn't been 12 it hasn't been 35k for the last 12 months i see you've been growing yeah yeah so you're right you're saying your revenue over the past 12 months total has been something more like like well like a hundred thousand yeah that would put you that way even less than that even less than that because we started we started uh offering our product to uh to customers let's say and charging them between those who were in beta testing probably in september i see i see what you're saying okay that makes sense got it all right and then in terms of cac what are you spending fully weighted cac to get a new three thousand dollar your customer well we spend for the uh for we we have segments and for the highest segment we spend less than thousand dollars okay but just for a three thousand dollar account what are you spending to get that account this is what i'm this is the number i'm giving yeah okay so your payback period there is what about four or five months four months and where's most that money going sales commission or direct spend or ppc or what none of the none of the above probably a little bit of sales a lot of content a lot in content i see content marketing what on your blog yeah uh we we started a blog uh and uh we use hubspot a lot which is a hell of a platform and we started producing videos a lot of content videos events but we we we do some kind of back to school we call them master classes so we bring someone an expert from a specific field from an expert from google to help publishers uh better manage their seo and expert from amazon to help them manage their hosting and we spend a lot on that video content and because this is where we think we can bring the most value yep and have the high and this is where we have the highest conversion rates so it doesn't work we our product is kind of complex so you need to have a lot of exposure and repetition and if you go on ppc that's going to ruin you and there's no way to scale at a reasonable price yep all right very good ben let's wrap up here with the famous five number one what's your favorite business book um paris business book tim ferriss uh for our work week number two is there a ceo you're following or studying right now yeah tim ferriss i like that guy i really like that guy number three what's your favorite online tool hub spot number four how many hours of sleep to get every night four out of five and what's your situation married single kids married no kids no kids and how old are you i'm 35 35 last question what do you wish your 20 year old self knew uh one is too small a number to achieve great things you said one yeah yeah guys it's very important there you have it to achieve great things you obviously need a wonderful team launched his company and live back in uh 2015 now 140 customers paying 250 bucks a month doing about 35 grand a month in revenue got first 10 customers via direct sales targeting revenue managers digital sales managers using a tool to get phone numbers called lush they are burning 20 grand a month right now in revenue raised 300 grand 17 people in france about less than two percent monthly revenue churn spending a grand to get a new thousand dollar customer so five month payback period ben thanks so much man for taking us to the top thanks dana it was great talking to you