Mobile rewards platform Kiip has announced the closing of a US$12 million Series C round, led by new investor North Atlantic Capital with an assist from US Cellular, also a new investor, along with previous investors Verizon Ventures, Relay Ventures, Hummer Winblad Venture Partners (HWVP) and True Ventures.
This brings the company’s total funding to US$32 million.
Vancouver native Brian Wong founded Kiip in 2010, after graduating from UBC at the age of 18, and then moving to San Francisco to pursue a career in technology and getting promptly laid off from his job at Digg.
Headquartered in San Francisco, with sales offices in New York, Chicago, Los Angeles, London and Chile, Kiip maintains an office in Vancouver, populated mainly by designers and front-end developers.
Working off the slogan “Mobile Advertising People Like”, Kiip teams with app developers and companies to create ads that run in mobile apps to offer rewards and other forms of enticement, which are triggered when ads are viewed by the targeted demographic during a moment in which they’re already engaged with the app.
In that sense, Kiip has forged a particularly moment-based, ephemeral form of advertising that appeals to mobile users, catching them at a moment during which they may be more receptive to a targeted ad.
Last autumn, Campari America used Kiip to offer young mobile users in neighborhoods dense with restaurants and bars $5 off a rideshare from Lyft while they were performing a different task on a Kiip-enabled app.
Kiip claims that it currently delivers up to three million rewards per day using this method, and that their mobile app ads have achieved an average hit rate of 19%, which is certainly much higher than banner ads, or other more intrusive forms of advertising.
Kiip’s SDK is deployed in approximately 5,000 apps, and claims to reach 150 million users a month worldwide, representing companies including Coca-Cola, Smucker’s, Campari, The Home Depot, Marriott, Advil, RunKeeper, Taco Bell, Clorox, and KitKat.
Kiip currently employs 100 people, and plans to use the investment to bring on more engineering and sales and marketing personnel, both in the U.S. and internationally, and also to fund growth.
In April, Kiip moved into the Chinese market after forging a partnership with Cheetah Mobile and now has its sights set on the Indian market.
Recently, Kiip has rolled out new ad formats, such as its video reward unit and the ability to redeem rewards via Passbook.
CEO Brian Wong has publicly affirmed that Kiip is approaching break-even and may get into profitability in the near term, without offering a concrete timeline outlining when that might actually happen.
Kiip was apparently profitable in Q4 2015, before dipping back into the red for the following two quarters.
That struggle with profitability is not so much an indictment of Kiip’s business model as an indicator that making money in online advertising is extremely difficult, with huge incumbents pouring untold millions into cracking the puzzle of online advertising, which still eludes even huge companies to this day.
Kiip claims to have doubled its revenue since this time a year ago, without providing specific figures, achieving 60% gross margins, citing the fact that collecting mobile-first user data remains central to its earning power.