The CEO of mobile advertising platform LoopMe says the London company is ‘looking seriously’ at an IPO within the next 3-5 years.
Stephen Upstone co-founded LoopMe in 2012 with the aim of using artificial intelligence and mobile data to optimise media campaign delivery in real-time.
Earlier this year, the scaleup was valued at around £150 million in a private equity takeover when Mayfair Equity Partners invested £87m for a majority stake.
“[The latest funding] is a liquidity event: founders, management, employees and Mayfair have all invested together for this next stage of the journey, which in private equity terms will typically last three to five years before the next liquidity event,” Upstone tells BusinessCloud.
“We’re looking very seriously at IPO within that timeframe as a potential option. We’ve had phenomenal growth, we’re very profitable. We’re also looking at inorganic ways to grow: acquiring other businesses to access new technologies.”
Through more effective targeting across online and offline marketing goals, LoopMe says it improves brand uplift, purchase intent, consideration, footfall and sales. Its services are currently available across mobile, connected TV, digital audio, digital out-of-home and other emerging digital advertising channels. The company’s clients include dentsu, Publicis, WPP, Omnicom, Pepsi, Microsoft, Sony Pictures, Hyundai/Kia and WarnerMedia.
The firm, second on our recent MarTech 50 ranking, estimates gross revenues of nearly $100m for 2021, having achieved revenue growth of around 50% a year over the past three years. The majority of revenues now come from the United States.
“Right from the beginning, we always had an equity participation,” says Upstone. “I think most of our employees find it incredibly motivating to be shareholders. It gives great long-term value to them.
“It also gives you a different mindset: more of ownership, you’re all working together for a longer-term goal. That’s really, really important in any growing business. So we offered stock options right from the beginning.”
He adds: “We have very strong organic growth: we’ve been growing at over 50% top line revenue per year and EBITDA has grown even higher than that.
“But we have some great assets: we have a big customer base, a lot of data, a big tech team, a big sales force and a great brand name – so taking other businesses that we can push through our channel and get a kind of 1+1=5, that’s something else that we’re looking at as well as part of our potential future growth plans.”
Upstone met his co-founder and CTO Marco van de Bergh at Ad Infuse, subsequently acquired into Velti which peaked at $1 billion of market cap following IPO. Van de Bergh spent several years developing global products at Silicon Valley companies before they teamed up to launch LoopMe.
“We saw that mobile advertising was still incredibly early – mobile video advertising especially – and that it was going to transform the future of brand advertising,” says Upstone. “What had traditionally been on television was going to be transformed by video on mobile devices and the data that we could use to provide marketers with what they really need: outcomes.
“On a really basic level, when you hold a phone close to you, it’s almost the same size as the television on the wall in the background perspective-wise. That kind of personal TV video experience is what originally pulled me into mobile.
“There was a lot more power to optimise the target within the mobile device, which was linked back to a single person generally rather than a whole household like a television would be.”
Upstone says Facebook wasn’t even running ads when the business was created. “When anything new comes along, people don’t immediately adopt it: you get a small group of people who are interested, but they need a lot of evidence, a lot of education, and sometimes the right pathway to be in place to make it easy to adopt.
“They can then understand the value and see that it can be very scalable and valuable for them in the future.”
As chairman emeritus of the Mobile Marketing Association, Upstone worked closely with broader industry to persuade advertisers to adopt mobile at a time when it was still considered an afterthought.
“In the early days, they would have thought about how the TV was shot: would it work on a smaller device? Would they have to change the format? How could they understand the audience? What was the impact provided by the mobile video ads – and how could they prove that through third-party evidence?” he explains.
“There were a lot of dots to join and people to be persuaded and motivated to help adopt. It was a slow adoption path by advertisers – even though now it seems absolutely self-evident! I think that’s something that’s probably quite common for lots of new innovations.”
There is no room for complacency with such a fast-moving technology. LoopMe is already looking at augmented reality and has an eye on the virtual world of the ‘metaverse’.
“We put 70% of our effort into the short-term, 20% into things that are maybe going to impact over the next 1-2 years – and never stop innovating on the things that might really change the business in 3-5 years,” he reveals.
“Within the core business, the short term, the marketplace is growing very rapidly: we’re going to new geographies, we are innovating to make our survey product more in-depth and provide more analytics for customers; and we’re looking at new types of purchase loop to optimise through to sales and other experiences. There’s a lot of innovation and growth still happening in that core business. It’s still a growing market: in four years’ time that market will double on its own, without the impact of us growing.
“The experiences that we are getting advertisers to be very interested in right now are often augmented reality experiences. So rather than full VR, you might hold up your phone on your driveway and walk around a car which drops into the image. That technology has really moved on a lot recently: it feels slightly more accessible – sort of ordinary and yet extraordinary.
“In our newer growth areas and longer-term innovation, we’re looking at the metaverse, standalone data products and measurement products with new partners to help us grow; we’re also providing more products now to publishers as well as to advertisers and agencies.
“These things might transform us on a 3-5-year basis.”