Altitude Digital, a video and display advertising technology startup, recently announced a $7 million credit facility from Silicon Valley Bank. The funding is the latest milestone in the company’s rapid growth, and reflects a strong investment environment in the ad tech sector.
Denver, Colorado-based Altitude Digital previously raised equity financing from Mercato Partners in December 2012, and since then has made significant progress, doubling in size while retaining profitability. Silicon Valley Bank was happy to provide the funds for growth on this occasion.
“Altitude Digital represents the type of companies we work with around the world, with innovative technologies, capital efficiency and patterns of high growth,” said Ron Singh, Managing Director for Silicon Valley Bank in a statement.
Altitude, a Red Herring North America Top 100 winner, has been profitable since its inception, which allowed the company to be more selective in its search for funding, according to Joe Grover, Chief Marketing Officer of Altitude Digital. The ad tech platform chose debt because of the added flexibility, the lower cost of capital, and to lessen dilution of the management team, Grover explained.
Altitude Closes $7M in New Financing from @SVB_Financial: http://t.co/Xw5m7Fuq0B We look forward to breaking new #adtech ground together!
— Altitude Digital (@altitudedp) August 4, 2014
The company’s new funds will be used to continue its growth off the back of an impressive quarter, which was the best in Altitude Digital’s history. The company grew over 300% year-on-year in Q2, and doubled its headcount. Altitude now has access to 15 billion pre-roll video impressions on a monthly basis and the aim now is to double the size of the workforce again and boost the number of publishers utilizing the platform.
Ad tech companies are attracting plenty of investment right now, and the space has seen an uptake in venture capital funding in particular. Advertising network and exchange startups raised more funds from VCs, corporations and angel investors in the last four quarters up to Q1, than in any other four quarter period in the past five years, according to research by CB Insights. There were 54 deals totaling $518 million between the second quarter of 2013 and the first quarter of this year – an 89.2% rise in funding year-on-year.
The data suggest that it’s a great time to be in advertising technology, but with huge numbers of companies in the space, consolidation has already begun. “We’re seeing the major video SSPs get funding or get acquired. The market is looking for technology providers to have scale and quality inventory,” said Grover.
“The rapid growth of online advertising is really driven by video mobile and that’s where we’ve laid our bets and built our business. It’s a terrific time because there are a lot of players in the space and you could make the argument that there’s too many – but the ones that provide the real value, those are the ones seeing the rapid growth,” he added.
Video advertising is growing at an astonishing rate. Digital video advertising spending will increase 41.9% this year, reaching $5.96 billion, according to a report by eMarketer. And that growth is only set to increase, as the research firm predicts that figure to reach $12.71 billion by 2018.