Deal in Focus: Notion and White Star pump $7m into Glow

In the past 12 months, Notion has taken part in a $7.5m series-A round for Adbrain and a £3m round for Rockabox, both London-based companies. The VC's most recent investment in Glow, a social advertising platform, is in keeping with its appetite for companies in the UK capital's adtech scene, and specifically those undertaking their first round of institutional funding. White Star Capital also led the deal alongside Notion.

"Adtech companies allow digital advertising to happen at scale in specific, technically niche areas and in an efficient way," explains Notion's vice president Wayne Gibbins. The sector was recently pinpointed as one with a particularly healthy UK future by Taylor Wessing's Mike Turner and Silicon Valley Bank's Erin Lockwood. Notion's Gibbins explains how the rapidly evolving consumer technology industry renders it increasingly difficult for brands' marketing departments to remain at the forefront of evolving trends and software. The result is an emerging industry whereby adtech companies "keep up with the pace of change, enabling brands to tap into their expertise," says Gibbins.

Recent quarterly results from Facebook and Twitter show that social advertising in particular is becoming an increasingly lucrative market. Last month Facebook reported a 67% year-on-year increase in quarterly advertising revenues. The $2.68bn generated from advertising accounts for the bulk of the company's $2.91bn total revenues. Twitter, meanwhile, recently reported a 124% year-on-year increase in overall revenues, with 81% of ad income generated from mobile advertising. Having agreed strategic partnerships with both of these brands, Glow appears well-positioned to capitalise on the booming industry.

Planet of the APIs
"Right now [for Glow] it's all about advertising at scale on Facebook and Twitter," says Gibbins. "Platforms such as Facebook, Twitter, Pinterest and YouTube are all starting to open up their ad APIs [application programming interface]. That means that, through a technology partner, you can start to deliver advertising into these platforms without using the native toolsets, which are primarily designed for market entry and mid-tier advertisers. Professional adtech products and services mean that you can launch campaigns across these services at scale and efficiently. Glow is the best example of a platform that enables brands like Spotify and King to exploit this opportunity."

According to Gibbins, Notion had been working on the deal for the best part of the year. As is the case with most of the deals the VC has completed in recent years, Notion was introduced to Glow through a series of trusted contacts within the ecosystem. "In this case," Gibbins says, "the earliest introduction was from one of the existing investors, Michael Blakey at Avonmore Developments, an angel investor who I have had a working relationship with for quite a while. We then found that there were other indicators that pointed in the same direction. If there's more than one person introducing you to the same opportunity that's always a strong signal."

As with most companies at the series-A stage, the initial focus for Glow will be to scale up its expansion team with the marketing and engineering teams likely to both see significant investment. "Glow is a special case to some extent," says Gibbins, "in that it is already an international business, which is often not the case at the series-A stage. The company has an office in New York, covering operations in North America and offices in Singapore - which is quite a recent move - serving Asia. London is not only a headquarters, where the majority of the development product team are, but it's also a European hub for operations in France and Germany. Initially, those three locations could act as hubs for expansion within each territory."

With social networks becoming increasingly lucrative marketing platforms and the London adtech scene booming, it will most likely be early investors, like Notion, that benefit the most before asset prices inevitably soar.

Advisers
Equity - Ashfords (Legal).

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