Japanese marketing tech firm Geniee, part of the SoftBank Group, has paid about $70 million in cash to acquire the revenue optimization platform Zelto (formerly known as AdPushup), a person familiar with the matter said, delivering 40 times return to a number of angel investors in the startup that began its journey in India.
The acquisition is a remarkable turnaround for Zelto, the 10-year-old firm that provides content creators and web publishers with tools to generate more revenue by tapping dozens of advertising exchanges, which faced near-death experiences twice in its journey. In 2014, the startup almost ran out of cash. Later, it scrambled with its product offerings after its marquee service struggled to make inroads, Zelto founder and chief executive Ankit Oberoi told TechCrunch in an interview.
The two firms announced the deal on Thursday, but did not disclose the terms of the deal. The source requested anonymity sharing private information. Oberoi of Zelto, which has been profitable for several years and raised less than $2.5 million in external funding during its startup journey, declined to disclose the terms of the deal. Elle, NDTV, CNET, PCMag, Mashable and GSMArena are among some of the customers of AdPushup, Zelto's marquee offering, according to the company's website.
“It’s been a rollercoaster ride. We had our fair share of challenges. But I think those challenging times were actually helpful,” said Oberoi. “After the launch, customers were leaving. Half of the team sort of left. But it forced us to look at the fundamental value we deliver to customers. And when we almost ran out of cash in 2014, we were forced to become frugal and profitable.”
The acquisition won’t significantly change how Zelto operates, he said. “It’s business as usual for us. But now that we have the support of a SoftBank-backed firm, we will invest a lot more in our growth and expand to Southeast Asian markets that we were not exploring earlier.” Zelto, which maintains a large team in India and started its journey in the country, identifies the U.S. as its headquarters and largest market.
"I am very happy to have this partnership that will greatly advance the purpose of Zelto and Geniee. My first encounter with Ankit dates back seven years. At the time, it was still a small company, but I invested in Ankit on the intuition that it would become a leading global entrepreneurship in the industry,” said Tomoaki Kudo, chief executive of Geniee, in a statement.
“I also feel a deep sense of respect for the fact that they have achieved high growth in the highly competitive cutting-edge markets of North America and India. In the future, we would like to learn from the North American and Indian markets, Zelto's technology, services, knowledge, and corporate culture, and strongly promote the globalization of Geniee to realize its purpose."