DataXu is seeking to become one of Boston’s next anchor technology companies — that is, around and expanding for a long, long time — and is achieving the growth results to support that goal, chief executive Mike Baker said.
The Boston-based company, whose technology aims to enable optimal digital advertising buys for consumer brands, saw revenue grow from $87 million in 2012 to “well north of $100 million” in revenue last year, Baker said.
“Hundreds of millions (in annual revenue) is what’s next for us, in the next 18 months,” he said. “We are focused on having a global footprint and being a leading independent tech company. We think the market opportunity is big enough that we have the opportunity to grow into a large, successful company.”
That market opportunity is around providing a system that automatically chooses relevant ads to display to consumers (as opposed to re-displaying ads at consumers for items they may have looked at on an e-commerce site, which can be highly annoying).
For example, DataXu uses probabilities to make guesses about what sort of ad a consumer will be interested in viewing, based on basic information such as an IP address (i.e., the person works at a corporation), location (they work in Downtown Boston), and time (they are online in the morning). Based on just that information, Baker said, DataXu’s system can make a guess that the consumer may be interested in an ad about a nearby restaurant for lunch. “You actually don’t need to collect all this (personal) information on people” to provide relevant ads, Baker said.
DataXu’s system makes inferences such as those “a million times a second,” he said, and the system learns which ads are effective in order to become even more relevant.
While the company started out in banner ads, video has become a major focus, with “some of the largest packaged goods and automotive companies in the world” running 20-second videos using the DataXu system, Baker said. “The fastest-growing part of our revenue right now is video.”
Other ad tech firms, whose systems Baker argues are not as sophisticated as DataXu’s, have managed to go public over the past six months — among them Criteo and Rocket Fuel.
But DataXu is “not in a rush” for an IPO, Baker said, noting that the company is not old enough to be in need of an exit for its investors (DataXu was founded in 2007).
The company employs 250, with about half of the employees at its Boston Innovation District headquarters, and has expanded now to 14 offices globally. Recent offices to open include Singapore, Poland, and Turkey.
Meanwhile, the firm continues to build its executive ranks, on Tuesday announcing that it had lured the head of a marketing technology company to be its new chief revenue officer. The executive, Ed Montes, had been chief executive and cofounder of Boston-based Digilant.
DataXu has raised $75 million in funding since its founding. Investors include Atlas Venture, Flybridge Capital Partners, Menlo Ventures, and Thomvest Ventures.