NextRoll, a San Francisco-based marketing technology company that's developing AI and machine learning-powered software, has secured $50 million in debt financing with an option for future equity from Capital IP.
The startup has previously raised just over $90 million in total equity funding. That includes a $70 million Series D in 2014 when it was also valued at nearly $600 million, according to PitchBook.
Its previous investors include Accel, Foundation Capital, 3Spoke Capital, IVP, Peter Thiel, Merus Capital, Western Technology Investment, Floodgate Fund and True Ventures.
"We haven't done an equity raise in quite a while," CEO Roli Saxena told me. "We are largely a self-funded company, and so we wanted to have an option to raise capital that is not dilutive to our shareholders."
The company will be building out its artificial intelligence and machine learning capabilities as it invests in its two main products, RollWorks and AdRoll, which serve B2B and e-commerce companies, respectively.
Previously known as AdRoll, the company was founded in 2006 by Jared Kopf, Aaron Bell Peter Krivkovich and Valentino Volonghi. It rebranded as NextRoll in 2019.
The past several years have been rocky for the digital marketing space.
Brands largely halted their marketing strategies during the first half of 2020 in response to pandemic-related restrictions and a swift change in consumer spending habits.
An uptick in online advertising in the second half of 2020 actually boosted digital advertising spending by more than 12%, according to CNBC, though that was still slower than the previous year when the industry grew by nearly 16%.
And after some delay, Apple released its so-called Ad Tracking Transparency feature in April 2021 with the launch of iOS 14.5. It requires apps to get permission from users to enable identity-related tracking for targeted advertising.
One year later, a little under half of iOS users had opted in to ad tracking, according to an AdWeek report at the time.
"We continue to see our customers spend with us because of where we sit in the buyer journey. We are very focused on the performance component of it, and focused on really driving the right conversions," Saxena said. "A lot of what we are starting to see is brand-awareness related. Advertising budgets in the industry are reducing, however, at the end of the day, customers are still looking to drive revenue and we are closer to the revenue funnel."
NextRoll says it has more than 12,000 customers and saw its subscription revenue increase about 50% last year compared with 2021; it now generates around $200 million in annual revenue. It also has more than 500 employees, and Saxena told me the company would continue to hire strategically.
