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The week before last, I wrote a short post about Vistar Media receiving $1.5 million in VC funding. The startup, which has its engineering offices in Philadelphia with more customer-focused functions based in New York, was founded by two veterans of Invite Media, which was acquired by Google for a reported $80 million in 2010, and one other co-founder, Jeremy Ozen. It will use a real-tme ad bidding platform as did Invite Media except in this case it will be used to place ads on what are referred to as out of home (OOH) digital displays that might be found in prominent outdoor settings, stadiums or arenas, stores, medical offices, or other of out of home locations where numerous people may pass by or congregate.
I had a chance to speak with Ozen by phone last week. It turns out that he is a UPenn graduate (materials science, finance); in fact, that is where he got to know Invite Media and fellow Vistar Media co-founder Michael Provenzano. The other Vistar co-founder, former Invite Media Chief Architect Mark Chadwick, attended Temple. Ozen had been working for Goldman Sachs in London in its European Special Situations Group monitoring a venture portfolio before returning to the States and joining Vistar. One thing Ozen emphasized to me is that Philadelphia is Vistar's official legal headquarters, althought its website lists a New York contact address. One question I had in my prior post was about Ben Franklin Technology Ventures, one of its backers, investing in a startup based out of state.
I also found out that Eniac Ventures, a New York-based VC firm focused on the Mobile space and managed by UPenn alums (hence the name) was among the investors in the round, although they were not named in the press release. Ozen also told me that Vistar had received a previous $500,000 in angel funding last year, coming from mostly within the Invite Media circle. I didn't ask whether two Invite Media co-founders, Nat Turner or Zachary Weinberg, who have a new healthcare IT startup in New York named Flatiron Health, were part of that investor group.
I asked Ozen what Vistar saw in terms of its addressable market. He said they estimated the currently monetized domestic OOH digital ad market to be $2 billion, with another $2 billion available but not yet monetized. They have not yet sized the international market, which could be quite sizable; from my point of view the penetration of digital OOH displays may be higher in some other parts of the world than in the US.
In addition to the online bidding platform Vistar has built a la Invite Media, another critical product component it has developed is what it calls "the first ad server built specially for digital place-based media." This is important because if Vistar is going to achieve its full market potential, it needs to be able to serve ads to the widest possible universe of existing digital displays, and there are challanges to this due to barriers including intermittent internet connections, network bandwidth restrictions and a lack of standards for communicating between heterogeneous devices. Vistar believes it has solved this problem; we will see if that's fully the case because its a thorny issue. Vistar has also built an API that media firms who want to deliver their advertising directly to digital displays can use.
Another opportunity Vistar sees, according to Ozen, is in synching or correlating OOH digital display advertising with advertising delivered to individuals' mobile devices within a nearby location. That opportunity, which is very appealing to marketers, may take longer to develop.
Ozen says Vistar currently has four employees in Philly and five in New York and will be adding a few more in the coming months. WPP is a major agency Vistar is working with, and on the partner side it is working with the Wall Street Journal, Accent Health, CMT (they place ads in cabs in Philly), Adspace Mall Network and others. It claims to have 80,000 unique locations and 8 billion impressions available as part of its inventory.