Digital advertising spend is expected to be a $330B by 2021 globally according to Statista. As more and more money runs into the space, it’s important that brands and agencies have the right tools at their disposal to properly assess the effectiveness of these digital dollars. Enter Pathmatics, a marketing intelligence platform performs a number of functions like tracking the spending, impact, and performance on ads across multiple channels (digital, mobile, video, and social). Pathmatics provides deep, unprecedented visibility across the ad industry, so businesses can keep tabs on competitors to optimize and understand the return on their digital advertising efforts.
LA TechWatch chatted with cofounder Gabe Gottlieb about why Pathmatics is so successful, the experience of building an adtech business in LA, and its most recent funding.
Who were your investors and how much did you raise?
We received a strategic investment of $3M in funding from Mintel and SPH Ventures. They join our existing investors Upfront, BDMI, and Baroda Ventures, bringing our total investment to $8M.
Tell us about the product or service that Pathmatics offers.
We are a marketing intelligence platform that provides competitive insights on creatives, advertisers, technology providers and publishers for online advertising. Our platform helps brands and agencies gain visibility into digital ad performance, their competitors, and entire industries. We do this by bringing together display, social, video, mobile, and native advertising data, helping users optimize media and marketing decisions and react as quickly as possible.
What inspired you to start Pathmatics?
Prior to Pathmatics, my cofounder and I worked at Microsoft. During our time there, we saw a huge opportunity to fix the transparency issue in digital marketing. We set our sights on working with brands, agencies, and publishers.
How is Pathmatics different?
We’re the only company to offer comprehensive visibility into industry-wide and competitor advertising data and creative for digital. This means we’re able to be a source of truth in digital marketing intelligence, delivering unprecedented transparency in a traditionally opaque industry. We’ve also just taken the wraps off Ad Graph, which is a graph of interconnected insights that make it easy to query, explore, and understand relationships in digital advertising data. Basically, it provides deep visibility across the industry, allowing you to see how all ads are connecting and the actual paths the ads take from source to a site or platform.
Would you tell us about the experience of building an ad tech company in LA and where you see the ad tech ecosystem evolving to in the next couple of years in LA?
When Tom and I first started the business, our recruiting pipeline was primarily candidates from the Bay Area and Pacific Northwest. Since then, we’ve seen high-quality engineering, sales, and data talent come out of local LA alumni networks from places like MySpace, Yahoo!, and other tech innovators — already resulting in exits like Convertro and MarketShare. We are committed to supporting the LA tech ecosystem and see a bright future with D2C players and the OTT video ad ecosystem creating new talent pools.
What market is Pathmatics targeting and how big is it?
We’re currently focused on helping agencies and brands. In the US alone, there are over 1K potential agency clients for Pathmatics. Any brand investing in digital across channels is an addressable client. For our enterprise clients, we can tailor our Pathmatics Explorer platform and the data to fit their specific needs through Connect and Custom.
What’s your business model?
We have a subscription model that provides full access to the platform.
What was the funding process like?
We have been steadily growing our business at over a 100% growth rate from the start. Given our client base and existing user base, we were under no pressure to raise additional capital. When we had discussions with SPH Ventures and Mintel, we saw it as a strategic opportunity to accelerate our partnership with Mintel and explore the opportunities in Southeast Asia.
We have been steadily growing our business at over a 100% growth rate from the start. Given our client base and existing user base, we were under no pressure to raise additional capital. When we had discussions with SPH Ventures and Mintel, we saw it as a strategic opportunity to accelerate our partnership with Mintel and explore the opportunities in Southeast Asia.
What are the biggest challenges that you faced while raising capital?
We weren’t actively raising when this opportunity came up, but I think right now the key areas of focus for investors that we have seen are product and growth metrics. They want to see that you have a product that is essential and used by your customers, so metrics like NPS, churn, usage metrics, and renewal rates are a priority
What factors about your business led your investors to write the check?
We have a massive momentum from new brands coming on board, high-impact strategic partnerships, happy users, and industry-leading technology innovation. We’ve seen unprecedented demand for our platform this year, achieved over 100% growth in sales three years running, and are impacting over $6B in annualized media spend across our customer base.
We all know that the ad industry faces major challenges around efficiency and transparency. Our investors can see that the Pathmatics platform solves for both of these pain points — it brings simplicity to digital marketing and enables marketers to make better, data-driven media decisions, remove waste from their budgets, and better compete in their markets.
What are the milestones you plan to achieve in the next six months?
Three milestones we are looking at for the company are expanding our channel footprint into new media channels, launching new data capture and processing techniques, and ramping up our go to market efforts with a growing marketing and sales team.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Prioritize your product and focus on delighting your users. If you do this, revenue, capital, and growth will follow. We get daily feedback from our users and track every interaction they have in our app to continuously refine and improve our platform.
Where do you see the company going now over the near term?
Pathmatics will focus on investments in recruiting, partnerships, marketing, and product development.
What’s your favorite outdoor activity in LA?
Our team here in LA is very active outdoors. We surf in the morning with the team, play pick-up soccer games, and a lot of us even ride our bikes to work every day.
