Innovid has raised $10 million in additional capital from Cisco Investments and existing investors, bringing total capital raised to date to $37.6 million. The new funds will be used for product development. Cisco and Innovid announced a partnership back in September, 2013, to deliver interactive, contextual video ads to second screens.
Aside from the financing, the big news from Innovid is the huge growth in its Innovid Atom video ad serving platform for brands and agencies. According to CEO and co-founder Zvika Netter, who I caught up with on Friday, Innovid has gone from 20 brands using its platform last July, to 110 now. This is expected to rise to 145 by the end of Q2 '15. Included among these are Kraft, Disney, Toyota, Chrysler and dozens of others.
The ad platform growth has fundamentally transformed Innovid, which has its roots in - and continues to emphasize - its "iRoll" interactive video ad format. Zvika says a "perfect storm" of at least 4 factors are accountable for Innovid's rapid ad platform growth, including:
- Preference by agencies to seek out independent software companies whose business models aren't tied to media sales.
- Shift by agencies to corporate-level decision-making on strategic technology choices.
- Growing awareness of viewability and fraud issues by agencies and brands, leading to demand for 3rd-party verification tools.
- Decision by traditional ad-serving heavyweight Vindico to emphasize its DSP solution over ad serving.
The challenge with ad serving has been that it's traditionally been seen as a low-margin business, as Zvika concedes. However, Zvika sees massive scale as the key for Innovid to have ad-serving be a healthy business, and more importantly, it better positions the company to sell in the iRoll solution. In this context, the ad platform business becomes an essential building block toward the company's original strategy of customizing video ads.
Looking ahead, Zvika's also bullish on the platform business because of the huge adoption of connected devices, which will increase online video viewing in the living room. This in turn leads to higher ad loads and the need for more personalization (the living room angle is also what Cisco is interested in, given its pay-TV operator relationships and big set-top box business).
Between these industry trends and its customer growth, Innovid is expecting to deliver 100 billion video ad impressions in 2015, a 500% year-over-year increase. That's driven headcount to 160, with another 20% growth planned this year. Innovid has to be one of the best examples around of how to nimbly take advantage of the rapidly evolving online video ad industry.