Ad Tech Agency Does $17m Gross Profit 2016, $30m VC Raised

Patrik Fagerlund

In Episode #788, Nathan interviews Patrik Fagerlund. He’s been working with mobile internet since the 90s. He’s an engineer by training and now, he’s the CEO and founder of Widespace, a mobile adtech company. Outside of work, he loves spending time with his family with his four kids and his wife along with many activities and sports.

Famous Five:

  • Favorite Book? – Business Insider
  • What CEO do you follow? – Elon Musk
  • Favorite online tool? — Slack and Flatly
  • How many hours of sleep do you get?— 6
  • If you could let your 20-year old self, know one thing, what would it be? – “Be what you want to be”

Time Stamped Show Notes:

  • 02:00 – Nathan introduces Patrik to the show
  • 02:36 – Widespace is a mobile advertising campaign
    • 02:40 – It was spun out in 2007 from what Patrik thought was a great media channel
  • 03:04 – Patrik sold media fueled by their technology
    • 03:10 – Selling media per CPM which is $10 per impression
    • 03:31 – This was the business model in 2009
  • 04:00 – $2M was the total ad spend for the previous model and 40% went to the company
    • 04:26 – Team size was 9
  • 04:38 – Widespace’s current business model spent $30M for ads
  • 04:40 – Team size is 130
  • 04:41 – “We’re moving into selling technology at a rapid space”
  • 04:49 – Widespace extends their tools and technology for both the supply and demand
  • 05:09 – Widespace focuses more on selling their technology
  • 05:28 – The model is close to SaaS, but the pricing depends on the volume and usage
  • 06:11 – Of the top 50 global advertisers, Widespace serves 70% of them
    • 06:24 – Widespace works with most of the umbrella agency companies in the world
  • 06:51 – The tech of Widespace is a full-stack offering
    • 07:01 – The algorithm is based on interests
    • 07:18 – If Widespace goes against other legacy technologies in adtech, Widespace will outperform them
  • 07:46 – A customer pays 50% of their ad spend to make use of Widespace’s technology
    • 07:54 – It’s a volume game, the more a customer pays, the less Widespace charges
  • 08:04 – If a customer puts $20M into Widespace’s system, it will go down to below $10M
  • 08:53 – Average ARR is around $4M
  • 09:06 – Since Widespace is a full-stack, they service both demand and supply
  • 09:11 – There’s a cap on the demand side and a supply cap to serve the supply
    • 09:26 – The suppliers are the top publishers in the world
  • 09:45 – Widespace takes a cut from the demand and supply side
  • 09:56 – Widespace charges on the extended version of the algorithm as well
  • 10:11 – Last year’s processed ad spend is shy of $40M
  • 10:49 – 2016 total revenue is around $17M
  • 11:04 – Widespace was initially bootstrapped
  • 11:16 – Widespace has raised close to $30M
    • 11:33 – Over the years, Widespace had propositions from strategics but they turned them down
  • 12:08 –Widespace is currently working with 500 suppliers/publications
    • 12:17 – Widespace keeps control of their supply and has deeper integration
  • 13:07 – A few years ago, Widespace was the only one who was servicing the publishers
  • 13:40 – Widespace doesn’t have any exclusivity
  • 15:02 – The Famous Five

3 Key Points:

  1. Adjust your technology depending on the needs of your target market.
  2. Find the right partners with whom you can grow your business.
  3. Be what you want to be!

Resources Mentioned:

  • Simplero – The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • GetLatka – Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio – Track your business performance across all departments for FREE
  • Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Show Notes provided by Mallard Creatives