Peter Kafka

Recent Posts by Peter Kafka

Still More Ad Tech Money! Rocket Fuel Rounds Up $50 Million.

Smart people keep telling me that there’s too much money plowed into ad tech start-ups.

And I repeat that conventional wisdom every time I write up yet another funding announcement for an ad tech company.

So here we go: Rocket Fuel, which operates what is essentially a tech-infused ad network, has raised a giant $50 million round, led by existing investor Northgate Capital.

Rocket Fuel also pulled in new money from Summit Partners and Cross Creek Capital, along with investments from earlier backers like Nokia Growth Capital. The four-year-old company has now taken in more than $76 million.

CEO George John says none of that money went out to employees or other investors. He says he’ll stockpile most of the round, so he can fuel internal expansion and/or M&A.

And if you’re interested in tracking the “What Did the Facebook IPO Do to Late Stage Deals?” meme, he says that he closed about half of the round after Mark Zuckerberg’s offering.

Oh. You’d like to know what the company does? Fair enough.

Rocket Fuel’s pitch involves references to “artificial intelligence advertising solution.” But the plain-English explanation is that they buy media on behalf of marketers, and use their own targeting technology to improve the ad buy’s efficiency.

Rocket Fuel says it generated gross revenue of $45 million last year, but bear in mind that the company’s net revenue, after factoring in the cost of the ad inventory it buys for its clients, will be much less than that. Still, John says that in the last couple months his company has hit a $100 million annual run rate, so he has a growth story to tell.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik