Kontera has recently announced the closing of a $15.5 million financing round, led by Sequoia Capital, with participation from Carmel Ventures and Tenaya Capital. Today, we are glad to interview Kontera’s CEO and co-founder, Yoav Shaham, whom we want to ask more about this exciting news as well as Kontera’s continued growth.
Yoav, you have been pioneering this space for almost 10 years, has your vision for the technology and the company changed throughout this time? And if so, how has it changed?
The original mission that we set for ourselves, to serve users by connecting the web’s information through an understanding of the true meaning of content and identifying user’s interests on any page, has not changed.
The technological approach and the algorithms that we use have gone through several major evolutions including growing from client to server solutions, and from business rules to more statistical analysis approaches to prediction of user intent.
Kontera has been profitable for some time, and growing very rapidly, why raise money now?
Yes, we’ve been asked this question a few times in recent weeks. We certainly did not need the additional funds for survival. Not only were we profitable, we also had a nice amount of cash in the bank. However, we identified some significant emerging opportunities in the market, and we want to ensure that Kontera is a dominant player. We believe that an injection of cash now allows us to make quicker and bigger moves in the marketplace, while maintaining our track-record of fiscally responsible operations.
Why did Sequoia Capital invest and lead such a large late-stage financing?
First of all I’m not exactly the best person to answer this question… What I can say is that this is a great testimonial for us, from one of the best Venture Capital investors in the world. They happen to know the search and advertising space very well, and they are very familiar with Kontera. Sequoia had a major stake in our company previously, but their recent investment is a clear indication of their confidence in how large this company can become. They did not need to lead this round, nor participate to the extent that they did. There were several external investors that wanted to come in, but Sequoia wanted to lead this round and to increase their stake, and we are honored by that validation.
What is your vision for growing the company? Do you anticipate any structural or organizational changes?
Growth always requisites some changes with it, it’s a function of maturity. In our case we’ve successfully managed transitions from 25 to 50 people, from 50 to 100, and from 100 to our current size. We are currently laying the foundational infrastructure required to run an organization of 250 and more people. I do not want to get into specifics, but can share that one of our highest priorities is to pursue excellence for the entire company. We are investing significantly in our people, their growth, and in our management. Historically we’ve been technologically, and engineering focused, with a smaller investment in market facing activities. Going forward we intend to increase our R&D ranks, and to significantly increase the sales, marketing, and services functions.
What are the implications to end users, and the more than 100 Million consumers who view Kontera’s technology in action each month?
As I mentioned earlier, our vision is to connect the Internet’s information dynamically to satisfy users’ current needs. Throughout the years we’ve continually improved the user experience, and the relevancy that we’re able to attain and deliver to consumers, today, is second to none. Looking ahead, users will see even greater utility as we increase that ad relevancy, as we increase the number of formats of in-text advertising offerings, and as we grow the breadth of information that we are able to bring to each pageview.
Our related-content and Hybrid offerings deliver beneficial consumer information, and we intend to do more in the area of In-Text related content. Also, within the advertising domain, we find that in many cases consumers prefer In-text advertising to much of the” loud” advertising that currently dominates sites and often occupies more that 30% of publishers’ page real-estate. Good in-text advertising can help users to better enjoy their internet experience. With this funding we will be able to more quickly provide users with a better experience at each of our publishers’ sites, and a better internet experience overall.
What does this funding mean for Kontera’s Publishers and overall network?
The user benefits I just discussed will also accrue to our publishers, whose core mission is to create and maintain their user communities. More engaged and satisfied users equate to healthier operations for our publishers. In addition, over time, Kontera’s publishers will be seeing new forms of engagement and related information for their audiences, and greater monetization opportunities for their content.
What does this funding mean for Kontera’s Advertisers?
Advertisers are looking for good return on investment for their advertising dollars. This may translate into more effective branding campaigns for some, or more effective direct-response campaigns for others. In either case, we’ll be able to deliver greater returns and greater performance for advertisers. The ways that this happens is first through our work on greater relevancy and user experience as discussed above, and second through greater engagement within our existing ad units and through creation of new innovative advertising units.
Where do you foresee taking the technology and products from here?
I don’t want to discuss our plans in too much detail, but there are a few headlines that I can probably share. The first is our on-going refinements to the relevancy engine. This is an analog to the R&D work that you see the search-engine vendors perform. This type of low-level algorithmic work does not produce many bells and whistles because the work is largely done on the back end. However, this is really the heart of the solution and improvements here create greater satisfaction for users and much greater financial results for advertisers and publishers. In addition you will see us offer greater flexibility and configurability, and customization ability for the various publishers and advertisers with whom we work. The last area to mention is the ever-growing set of tools that we provide to advertisers and publishers for utilizing our In-Text advertising and related content solutions.