SaaS Interviews with CEOs, Startups, Founders
828: AdTech: MobFox Acquired for $14m by Matomy, Now $36m+ in Ad Spend Annually
30 Oct 2017
Chapter 1: What is the background of Gil Klein and MobFox?
He joined his parent company in 2006 before making the recommendation to acquire Mobbox. They acquired it for about $14 million back in 2014, I believe you said. In 2015, that platform had $18 million in ad spend processed, of which Mobbox kept about $3.5-ish million or about 17% to 20% gross. In 2016, they more than doubled to almost $36 million in total ad spend.
They're working with between 20,000 and 30,000 publishers, of which 4,000 are meaningful, and about 180 demand-side platforms, which could have 1,000 advertisers on that one DSP. They got 74 people, again, trying to make it easier for folks, especially mobile app developers, to find the right advertisers, to get render rates up, and to generally bring more efficiency. This is The Top.
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Chapter 2: How did Matomy acquire MobFox and for what amount?
Five and six million. He is hell-bent on global domination. We just broke our $100,000 unit sold mark. And I'm your host, Nathan Latka. Many of you listening right now don't have time to listen to every B2B SaaS CEO that I've interviewed.
If you want to get access to the database I've created with year-over-year growth rates, customer accounts, margins, and many, many other data metrics and data points, you can go to getlatka.com. Here's the thing though, this database, I keep it to myself. It's so freaking valuable.
And to preserve the quality of the data and make sure that the people that have access to it have a true advantage, I'm only letting 10 companies on each month.
Chapter 3: What is MobFox's revenue model and how does it operate?
So we're full this month, but you can go to getlatka.com to get on the waiting list for next month. And look, there's big people on the waiting list. I mean, the biggest VCs you've ever heard of. You've probably heard of them. They're big, private equity, billions and billions under management. So it's an impressive waiting list. Go get on now at getlatka.com. Hello, everybody.
My guest today is Gil Klein from MobFox, where he's a managing director and a C-level executive at Amadami Media Group. Having joined the company in 2006, he's been a member of the executive management team since 2014 and previously served as senior vice president of media and senior vice president of clients for the group.
Chapter 4: How has MobFox's ad spend changed over the years?
He holds an MBA in international management from the College of Management in Israel. Gil, are you ready to take us to the top? For sure, I'm here. Good. Okay, so help us get some clarity here. What's the difference between Mob Fox and Mattamy, and where do you spend most of your time? Okay, so Matomi is a global performance company.
It holds a few of different entities, some that it built organically, some that it bought through M&As. It's a public traded company in London and in Tel Aviv, here in Israel. Personally, I run and manage and oversee MaFox, which is a mobile in-app audience SSP that Matomi acquired at the end of 2014.
Chapter 5: What types of publishers does MobFox work with?
So, we're part of the in-app space. We're the pillar in the SSP space for Matomi. So, Matomi holds an SSP in video, which is Optomatic, an SSP in mobile in-app, which is us, an email business, a domain monetization business, and I'm here to represent MopFox. What did Matomi pay for MopFox in 2014? So if I remember correctly, it was around 12 million in cash.
And of course, there's an earn out based on performance models. And did you come from MobFox or you were inside of Mattamy and you were the guy that said we should acquire MobFox? So I'm with Mattamy since 2006. So I grew the company. So I was, I think, employee number 14.
Chapter 6: How does MobFox connect with demand-side platforms?
So I've been involved and engaged in all the different activities that Mattamy used to have in the past and has today. For me, it was a no-brainer knowing the MobFox team, seeing the products, hearing about the reputation in the market. I was indeed an important part of voting for that deal, for sure. So tell us what MobFox does and what's the revenue model? How do you make money?
Okay, so Moffox, it's important to say, makes money when its clients make money, right? So when the publishers earn money and when the demand partners find the right users, the right inventory pockets they're looking for that meet their KPIs, that's where we make money. So Moffox is an SSP, meaning it's a supply-side platform, of course.
Most of the tools, the platform, the tech, is for suiting developers' and publishers' needs, focusing in the in-app space. which is ad serving, mediation, smart mediation, an SDK solution.
Chapter 7: What unique strategies does Gil Klein use to acquire customers?
We're building a very interesting data offering, supporting display video native elements. So again, it's publisher focusing, giving the publisher developers all the tools they need in the mobile space to actually manage smartly their inventory and maximize their revenues. From a demand perspective, we're trying to contact and reach all the biggest demand partners in the space. Name one or two.
So whether it's UMI for video, AppNexus, PocketMath for performance, we own and operate our own DSP. So it's a wide variety of DSPs from performance to brand to location like XSAD to remarketing companies. So basically connecting between supply globally for in-app and finding the right demand in all the different types of verticals and spaces I mentioned. So it's a big mix.
So you're mainly helping developers monetize their apps via in-app advertising, and you're then helping them also find the advertisers to buy that ad space. Correctly.
Chapter 8: What are Gil Klein's personal insights and advice for the audience?
And we're trying to do this everything, of course, in an R2B environment with smart algorithms to make sure that we mix and match the best way that we can. Okay, so give me some numbers here. So you launched, you bought in 2014. When you bought it in 2014, how much volume, I guess, was going through your platform? So I can tell you that in 2015, we just bought it. It was like November 2014.
So in 2015, in terms of revenues, we generate just almost $18 million. Now, just to be clear, $18 million is the gross transaction volume through your system of which you keep what percent? Correct. So it really depends on the type of transaction we have with the publisher. It ranges on a revenue share model, depending on how big it is, how strategic it is on the market.
There's a lot of elements. But of course, we keep some of that portion. That's how we make money. What did you keep of the 18? So I don't remember exactly that year, but usually on gross numbers, it's around somewhere between 17 to 20%. Okay, got it. So you keep calling it 3.5 million on the 18 million, something like that. That's on a gross level.
You have all your expenses, employees, offices, all these things. So it's not net income, it's gross income. But again, it really changes by specific publisher and format. There's a wide variety. Just to add to that context, Nathan, last year we grew already to over 36. So we saw very good growth following the first year of the acquisition.
This year we already feel very good about our trends and our growth. What do you already pass? What is your today? So we're a public company, of course. In a month or so, we will be giving those numbers. What was the last report you gave, like Q1 or Q2? So in London, in the stock exchange that we're at, we give figures following H1, only half-year results and not quarterly results.
So that will be announced in the coming months. Got it. I can tell you that I am feeling well on where we're at and our trends. And last year we had nice growth. So I feel that we're in a very good place, especially focusing in this world where I find a very interesting blue ocean, which is the in-app space.
In 2016, did you still have the $36 million keep around the 17% to 20% mark and gross for yourself? More or less. Okay. And then in 2017, do you think you'll break $50 million in ad spend processed? What's your stretch goal? So my goal is to stretch this as much as I can. I'm very competitive, to be honest. I come from sports. So for me, the more the better.
I think similar, we've seen very good growth rates in the past. I'm hoping and I'm feeling that we can achieve the same type of growth rates. But again, we need to be a little bit patient. We'll give those results. How many publishers are you working with? So we have a few, let's say, between 20,000 to 30,000.
To be honest, if you look at ones that pass decent thresholds, it's about 4,000, which a big majority of them are also SDK-based, which gives us a lot of leverage. What do you mean by that? By SDK-based? Yeah. I mean, obviously, I know what SDK stands for, software development kit, but what do you mean when you say SDK-based? Exactly.
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