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Artificial Intelligence: How NextRoll Rolls

To our Valued Investors:

The year is 1955. You are employed as a marketing director at a chain of car dealerships in a large suburban area outside of Chicago. You went to school for this job, so you have it covered. This particular business is a large one as far as regional auto dealers go, so you are blessed with an annual advertising budget of $5000. That kind of moolah gives you power and influence, but you mustn’t abuse the position. You’re careful to place your print ads in prominent daily newspapers like the Tribune, and occasionally in magazines like the newly-launched Sports Illustrated. Avoid Good Housekeeping. After all, your goal is to reach the men of the household, since they are the ones who make the important decisions like where to purchase an automobile. Stick with the newspapers and the sports reporting and capture an almost exclusively male audience. Make sure to include something in the ad that promises a perk for those who mention the ad while visiting the dealership. That will be a slick way of demonstrating to the bosses that the marketing scheme is working. If you generate enough traction, you will be allotted more money for your efforts, and perhaps you’ll have the opportunity to break into the big stage for advertisers. Radio spots and TV commercials, here we come. Again, make sure that those costly pitches are thrown during news reporting or sports broadcasting. You don’t want to toss money down the drain by advertising a car dealership in the middle of a daytime drama. Leave that airtime for things like cosmetics and vacuum cleaners.

If the above scenario offends you, at the beginning of Women’s History Month no less, please accept our apologies. Of course, we would not have expected you to take such a depiction the least bit seriously. On the contrary, we hope that the emphasis on the absurdly unevolved attitudes toward gender roles that were more commonplace in the middle of the 20th Century helps to illuminate a point. Just as the hypothetical marketing genius’s understanding of men and women as consumers was right out of the Dark Ages, the tools he wielded for his craft were quite blunt by today’s standards.

The methods of drawing exposure to products and services improved gradually with things like high-budget Super Bowl spots, celebrity endorsements, and strategic product placement in Hollywood films. The big leap, though, occurred because of the advancements in computer programming in recent decades. The key to successful marketing efforts can now be found in the effective deployment of marketing and data technology software. San Francisco’s NextRoll, Inc. is an industry leader that has a firm grip on the reins of this state-of-the-art means of helping advertisers display their wares.

At its beginnings in 2007, NextRoll was known as AdRoll, and it was primarily focused on perfecting the business-to-consumer marketing process. Their mission was to harvest paying customers from the public masses surfing the net. As they explored new opportunities, AdRoll launched RollWorks as a business-to-business marketing platform in mid-2018. In September of the following year, AdRoll rebranded as NextRoll, a parent company with its original consumer-facing product (still called AdRoll) intact and with RollWorks as an autonomous B2B vendor. At their core, AdRoll and RollWorks operate in the same fashion, but with differently scaled objectives. The highly advanced coding embedded into NextRoll software employs a constant trial-and-error algorithm to determine which advertisements are bringing home the bacon. For instance, AdRoll campaigns will negotiate the most cost-efficient exposure opportunities within Google, Facebook, Instagram, and up to 500 other internet outlets. Linked to the advertising client’s end-point commerce pages such as Shopify, AdRoll can easily determine which ads most adeptly inspire shoppers to open their wallets. Through constant repetition, patterns become evident, and the winning ads are pushed with a greater portion of the budget while the less effective ones are gradually phased out. Real-world road testing like this continues until the campaign is fine-tuned nearly to perfection. In other words, the software learns about the product by understanding what imagery attracts the most attention and it figures out audience behavior by tracking where the “buy now” clicks are happening. It is a fascinating example of how machine learning can translate into increased sales revenue for clients, and those clients are happy to pay for the boost in sales.

RollWorks, NextRoll’s business-to-business offering, assists advertisers who don’t typically need to seize the attention of individual consumers. They help give voice to tire manufacturers who want to land a contract with massive car companies, or to linen services who would like to be known among hotel chains. This kind of pitching, presumably to a savvier clientele armed with their own marketing departments, requires more finesse. Still, the same approach of figuring out over time what works and what doesn’t pays off in much the same way. RollWorks reportedly captures an ROI that is approximately five times greater than that of other account-based marketing vendors. What’s more, in 2018, NextRoll acquired lead generation & outbound sales automation specialist Growlabs.com. With this incorporation, RollWorks benefits from an additional 325 million contacts and 18 million company accounts. With such an abundant Rolodex, RollWorks has the means to put any B2B vendor in touch with the right people to move inventory. Beyond making connections, though, RollWorks figures out how to position the seller in the most attractive light.

As the process moves forward for both AdRoll and RollWorks, campaigns expand and modify to scale in tandem with the company’s growth. All of this happens in NextRoll’s user-friendly dashboard. Every campaign’s lifespan is plotted out with easy-to-understand graphs and charts detailing successes and failures. After a few weeks on the job, NextRoll’s trackers have enough data to guide clients on how to manage campaigns and direct them toward maximum efficiency. It democratizes the entire exercise as it endows smaller enterprises with the kind of marketing prowess that had until recently been the exclusive domain of behemoth corporations like Ford, Nike, and McDonald’s. This is the kind of thing that businesses of all sizes are willing to pay for — indeed what they need to pay for in order to survive — and the leaders in venture capital apparently know this. NextRoll has raised $111.02M in 10 rounds of funding, most recently completing a Private Secondary Transaction. Previously, they raised a $70M Series D round at a post-valuation of $598.12 million, a 4.88x increase from their Series C. Among their early investors, perhaps the most prominent is Peter Thiel’s Founders Fund. Thiel is, of course, the co-founder of PayPal and of Palantir, and he is an early stakeholder of the likes of Facebook, LinkedIn, and Yelp. This should give you some inkling that the guy knows how to put his money to work and, by extension, that a company like NextRoll just might have some legs to it.

Also encouraging is that NextRoll has been generating revenue since 2012, and they brought in $175M in 2020. They are projecting record EBITDA into the eight figures, growing more than 400 percent year-over-year. Numbers like these would prompt shrewd investors to look into scooping up a few NextRoll shares on their TD Ameritrade accounts, but that simply cannot be done at the moment. NextRoll, you see, is a private company, and as such its shares cannot be bought on any public stock exchange. Iron Edge VC can, nonetheless, provide you with access to our Fund that has ownership interests in this company that applies cutting-edge AI to the very business of creating commerce. If you would like to learn more, or if you know anybody else who would, please don’t hesitate to contact us by clicking “Get in Touch” below.

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 As always, shares are available on a first come, first served basis.

Paul Maguire, Managing Partner and The Iron Edge Team

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Paul Maguire

Founder And Managing Partner