Deal in focus: Active Venture et al. invest in adjust

Active Venture Partners is the latest venture capital firm to take an interest in adjust, leading the mobile analytics company's $7.6m series-C funding round earlier this month, with participation from all the company's existing backers.

Having been named an official mobile measurement partner (MMP) to social media giants Facebook and Twitter, it took Berlin-based adjust just two-and-a-half years to build an internationally recognised company endorsed with the ePrivacy seal of approval; online and mobile products receive this award following an audit and a technical and legal review to ensure they comply with both German and European data protection laws.

Talking to unquote" last year, both Andreas Heubl, partner at BayBG, and Uwe Horstmann, founding partner at German incubator Project A Ventures, said they believe the NSA scandal helped add value to the data security sector, with Heubl maintaining "the demand for German software has flourished among customers".

For adjust's founders, having stringent privacy requirements – information is stored in secure German data centres – is equally as important as having a high level of connectivity. The company was born out of a need to understand the most efficient advertising channels available for the founders' original mobile gaming app, which was soon sidelined.

"App developers use adjust in order to attribute a download to a certain advertising channel; without it, companies would be unable to gauge the return on investment of their campaigns. One of adjust's competitive advantages is its broad coverage of advertising channels," says Philipp Schroeder, founding partner at Active. More than 300 major networks worldwide are integrated with adjust and clients include Deutsche Telekom, Bauer Media Group and Zalando.

Considering it deals with 600 Terabytes (600,000 Gigabytes) of new data per day, Menlo Park-headquartered Facebook is understandably concerned about protecting its users' personal data. After only 10 months in operation, adeven, as adjust was formerly known, was chosen by Facebook to be one of 13 MMPs in February 2013.

A year later and that number was reduced to 11 when Facebook terminated contracts with HasOffers and Kontagent for violating the terms of service agreement; the companies allegedly held data for longer than necessary and suffered the wrath of a Facebook audit. "Privacy nowadays is a very delicate issue and you can rapidly damage your reputation," says Schroeder. "That's why adjust has the highest privacy standards at its core."

International aspirations
Barcelona-based Active invested via its second technology fund, Amerigo Innvierte Spain Ventures FCR, and only intends to invest €10m of the €54m total outside of Spain. The VC heard of the business through its longstanding relationship with Capnamic Ventures, which invested alongside Iris Capital in June 2013. The $4.3m series-B round also received further commitment from initial investor Target Partners, which backed adeven's series-A in May 2012, just a month after its inception.

The initial seven-figure sum was used for new offices in San Francisco and to complement its Berlin site, while adeven launched its adjust.io app-tracking tool with the series-B round. On its second birthday, adeven announced a name change to align its product and brand. This time around, the company confirmed that 50% of the fresh growth capital was specifically designated for expansion in Asia and the US, from where it generates 40% of its entire revenue.

Schroeder, who takes a seat on adjust's board of directors, says the business intelligence platform would not have passed Active by as it was screening the market for suitable investments in the sector. "In the mobile analytics space, adjust was the best company. A lot of its competitors are in the US, but Europe has a better reputation in terms of privacy standards and that's why many companies switch to adjust. Another driver of their success is their open source SDK [software development kits] which is highly reliable, high-performing and transparent."

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• Topics
• DACH
• Expansion
• Deal in focus
• Germany
• Bayerische Beteiligungsgesellschaft mbH (BayBG)