Distribution, distribution, distribution.
That’s the name of the game in the arena where Austin brothers and serial entrepreneurs Leo and John Resig play.
“Distribution is the queen who wears the pants,” John Resig said.
And that’s the spending focus of the $25 million in fresh capital their latest venture, Atmosphere, closed last week, the two said in an April 23 video interview. John Resig is president and Leo Resig is CEO of the company.
Operating legally as Rarefied Atmosphere Inc., the company has created a television network that other businesses can show to consumers — think of videos of bloopers and skateboarding tricks, often played without sound, in crowded bars and restaurants. It spun out of Chive Media Group Inc. in 2019.
As one of the first websites to harness the power of viral videos, The Chive built a thriving and profitable community around the idea that people would rally around a brand that brought them the funniest content on the internet. The Resigs founded that business in 2008.
Chicago-based Valor Equity Partners, which also has invested in Tesla and SpaceX, led the series B round, which values Atmosphere at $275 million. The company has raised at least $39 million to date.
"We're currently in the midst of a massive shift in the TV market as billions in ad dollars migrate from linear TV to streaming platforms," Jon Shulkin, partner at Valor Equity Partners and fund manager at Valor Siren Ventures, said in a statement. "Atmosphere is uniquely positioned to own the out-of-home TV streaming market with an installed footprint that's incredibly broad and with advertiser offerings that combine the best of traditional TV and digital targeting to reach people where they are."
Leo Resig said Atmosphere had about 13,000 customers — Westin, Taco Bell and Texas Roadhouse, to name a few — while the addressable market represented 1.5 million potential customers.
“We’re going to efficiently throw money at growing our customer base, and dig a deeper mote faster,” he said.
Leo Resig said he noted a 2020 trend that helped Atmosphere grow as the Covid-19 pandemic swept through the globe: Swaths of America outside the country’s urban centers “did not shut down as much as the larger cities.”
The company, Leo Resig said, “needs butts in seats” — be they at medical-office or auto-dealership waiting rooms, or at bars, hotels, restaurants and gyms.
Those types of businesses, in general, Leo Resig said, “proved pretty durable during the pandemic.” Which is precisely why Atmosphere is looking “to diversify our customer base in a pretty big way.”
More of those types of companies have cut the cable TV cord and switched to streaming services, he said, allowing the company to grow by 10 times during last year’s four quarter.
Atmosphere currently employs 100. Leo Resig anticipates hiring another 150 to 200 during the coming 12 months, about 75% of whom will be based in Austin, he said.
Other advertising and sales teams will be hired “in major media markets,” such as Chicago, Los Angeles and New York, he said.
The company declined to share revenue figures. But Atmosphere achieved profitability during last year’s fourth quarter, though the Resigs both emphasized the goal is to grow now.
By spending money “at a controlled burn,” Leo Resig said he and his colleagues “want to be the elephant in the room, a household name.”
He points out that “no one’s paying attention to TV in businesses. We’re the only player in that space. We have to act on that fast.”
The company boasts a 2,300-square-foot office at 416 Congress. With headcount projections “on track for 600 high-paying jobs by 2024, mostly based in Austin,” the startup is going to need more space sometime in the relative near future.
Ace Schlameus, JLL senior vice president of industrial brokerage, and JLL Managing Director Russell Young in Austin are Atmosphere’s commercial real estate brokers.
All options remain on the table as far as potential exits go, Leo Resig said.
