Portfolio News
WPP funds Invidi
The Deal
Clifford Carlsen
14 December 2007
Targeted advertising delivery software maker Invidi Technologies Corp. raised $25 million in a third funding and added advertising giant WPP Group plc as a key strategic partner as it moves to market with technology that aims specific marketing messages to consumers via set-top boxes.
WPP led the round, bringing total venture funding in the seven-year-old company to $53 million.
Previous investors InterWest Partners of Menlo Park, Calif., EnerTech Capital of Wayne, Pa., and Menlo Ventures of Menlo Park also participated. The round is positioned as the company's final private capital investment before moving to market and reaching positive cash flow.
Invidi executive vice president Michael Kubin said the company began a fundraising process about 18 months ago and did not specifically target strategic investors but snapped at the chance to work with WPP. As the parent company of advertising agencies including JWT, Ogilvy & Mather and Young & Rubicam, U.K.-based WPP is the second-largest media company in the world behind New York-based Omnicom Group, and the company has operations in more than 100 countries.
"WPP is the largest media spender in the U.S., responsible for $1 out of every $3 in billings, and they have an enormous involvement and impact in every media," Kubin said. "The most important thing for us now is to gain involvement with distribution outlets, and they have influential relationships with any and all of those."
Invidi is developing technology to target advertising to very specific demographic profiles by programming set-top boxes to identify such profiles of viewers. The company was founded to offer cable, satellite and Internet-protocol-TV service providers ways to capitalize on the growth of pay TV and get a larger share of advertising revenue relative to their content providers.
The company has developed a suite of tools to help operators target viewers anonymously yet more accurately by analyzing viewing habits within individual set-top boxes to create more targeted advertising messages. Kubin said the company has worked closely with operators running the gamut of delivery technology from traditional cable operators to telecommunications carriers, and while it has not yet deployed commercial services, he said it is on the cusp of launching several pilot systems. He said the new round was positioned to launch commercial service and reach positive cash flow and that he would be "amazed" if it needs to raise additional investment before getting to profitability.
Doug Pepper, a partner with InterWest Partners, which led Invidi's $16 million Series B round in January 2006, said the size of the round is key to getting commercial operations under way, but that the participation of WPP will help the company define the sector and establish leadership in a new market. With the new investment, Invidi will also add WPP representative Irwin Gotlieb to its board of directors.
"Obviously, raising $25 million is great for the company, but more importantly, we think WPP is the best partner we could possibly have," Pepper said. "We had a number of financing options, but with adding Irwin Gottlieb to the board, this can add great value, and this will be a very deep relationship." Invidi did not use an outside financial adviser putting the round together. The company had legal work on the deal from Matt Perkins of Jacobs Chase Frick Kleinkopf & Kelley LLC in Denver.