Pierre Chappaz is the Executive Chairman and Co-Founder of Teads. Teads recently announced it has raised $47 Million in debt financing which will go towards acquisitions and further Asia expansion.
1. What motivated this level of funding, and how will debt financing differentiate this investment from your other rounds? What do you hope to do with the funding?
We want to aggressively pursue M&A opportunities in order to strengthen our leading position in the video advertising industry. When you acquire a company, you can do share deals, and we’ve done them in the past, but it is diluting our shareholders. Having more cash available (we will have close to $70M in the bank following this round), we will be able to pay in cash, and the cost of this cash is quite limited given the very low levels of interest rates.
2. One of your investors is Chinese, which seems to be an ongoing trend of Eastern investors in ad tech. Was their investment namely to help expand in APAC? Why is this market attractive to you?
Bank of China likes to support global businesses such as ours, and they will certainly help us when we enter China next year. This new debt facility is namely targeted at funding our Asian expansion. Until today we have been focusing mainly on U.S., Europe and LATAM, with Japan being our only operation in Asia. We already have significant demand from global brands, particularly in the luxury sector, to help them distribute their video campaigns in China, Singapore, and other Asiatic markets. The next logical step for us is to build up local teams on the ground to cultivate our relationships with the most influential publishers, and to provide our outstream services to local brands. Keep in mind that Japan and China are huge markets, China is probably half of the U.S.
3. Can you share what percentage of the business’ revenue now comes from programmatic? Can you also share some color on the breakdown between media sold by Teads’ managed service team vs. publishers’ own sales forces? How has that shifted and why?
Our programmatic business is growing very rapidly because programmatic needs more quality video inventory at scale, and this is what outstream provides. We have connected 1.2 billion unique users to all major DSPs, in partnership with hundreds of the very best publishers all over the planet. Revenue wise, programmatic now represents 30% of our revenue, while it was insignificant last year. Our objective is to get to more than 50% in the next few quarters.
4. Google recently revealed plans to support outstream and you see a general uptick in players vying for this format – how do you think this will impact Teads’ own business?
When we invented outstream back in 2012, we knew that this would be a complete game changer for video advertising inventory because it reconciles quality and scale. The fact that so many industry players are copying our format validates our vision entirely and actually accelerates the growth of this brand new market that we have created and that we are dominating. The difference between Teads and all the copycats is that we dedicate 100% of our resources to outstream technologies and innovation, so we are always ahead of the game. We have been the first to offer an outstream SSP, as well as vertical, square and 360-degree outstream formats. We are the only ones capable to run on Google AMP, and hopefully soon on Facebook Instant Articles. And the quality that we provide to our partners, publishers, brands, agencies, and trading desks is not only the quality of our technology, it is also the quality of our service which is second to none. This is one of the main reasons why the world’s most prestigious publishers are partnering with us like The Washington Post, Forbes, Mashable, Slate, Bonnier Corp., Newsweek, Salon, The Telegraph, The Guardian, Le Monde, Corriere della Serra, El Pais, Die Welt, Nikkei, O Globo, El Universal, and many others. As a result, comScore consistently ranks Teads the number one video advertising platform globally since December 2015.
5. M&A is mentioned in the release – can you share any more detail on what possible solutions areas you don’t currently have a foothold in, and where you might flirt with expansion?
I hope that we will be able to announce one significant acquisition soon, although I cannot comment at this time.
6. How big is the Teads’ team now? Number of customers? Do you expect to hire more and in what role areas as a result of this funding?
Teads is a team of 450 people, working in 18 different countries. Our main markets being the U.S., the UK, France and Germany. We have a very strong product and development team based in France (100 engineers). One of the things that the French do well on top of food and wine is code! We actively recruit in all countries, especially in the U.S. and now in Asia for roles on our publisher, brand, and trading desk teams, as well as agency sales execs, technical support, product managers and developers. To your question about our customers, 83 of the top 100 global advertisers are working with us. We have strategic partnerships with leading brands such as Microsoft, IBM, Samsung, Nestle, UBS, Richemont, LVMH, Renault, Total, and Activision Blizzard.