The offices of Verto Analytics overlook a pasture. The contrast between the view and this young, successful company is huge: only 14 months after launching their product, the company has already made an impression on the big corporations of Silicon Valley and New York. Even the executive team of Facebook is using data produced by Verto when planning on how to beat Snapchat.
Verto has built a scalable SaaS (Software as a Service) information service on top of their multichannel media measurement data and is now actively selling it to the world's largest internet, TV and advertising companies through their offices in San Francisco, New York and London. If you ask the folks at Verto, the future will see even more companies using Verto's products to beat their competitors. Also, the majority of advertising budgets will be channeled according to measurement data provided by Verto.
The CEO of the young company, Hannu Verkasalo, is not old himself, although you could easily be mistaken if you were only going by his CV. The Doctor of Technology has a total of five university degrees and is also a successful serial entrepreneur. One of his companies, Zokem, was sold to Arbitron, a company listed in the USA. The sale rocketed Verkasalo to the role of Deputy CEO at Arbitron. It's safe to say he has quite a track record.
Verkasalo himself divides his entrepreneurial career into three parts. His first companies were focused on consulting and subcontracting work in analytics and the mobile sector. During the second part, he worked on technology and product-based companies. For example, the companies Menudata and Zokem were built around licensing technology or selling software to consumer and corporate clients.
Now, in the midst of the third and freshest part, Verkasalo has devoted himself to the role of CEO at Verto Analytics. This time, the focus is on offering data or, in other words, selling information in the form of a SaaS service.
"The big breakthrough came when I was speaking with the executives of Facebook in Palo Alto and NBC in New York", Verkasalo describes the establishment of his company. "Both companies mentioned that a lack of information on consumer behavior in the new world can really deter their growth."
By new world, Verkasalo means modern consumers that use multiple devices: televisions, smartphones, computers or even wearable technology.
"Companies had no idea whether their services were growing faster or slower than those of their competitors", Verkasalo continues. "In addition, they weren't able to use outside data to sell their own audience to advertisers."
Competitors in the field, like the Finnish Finnpanel and the American Nielsen (valued at 18 billion US dollars), have chosen to focus on measuring only one device. Since the beginning, the idea behind Verto has been to paint a wider, more comprehensive picture of media usage. "We are measuring the consumer – not just a single device, website or app", Verkasalo points out.
This is important, he says, because during the last five years, users have evolved more than during the last one hundred years put together. Meanwhile, technology is developing at a vigorous pace and some of the popular devices of the next 10 years might not even have been invented yet.
"I believe this phenomenon will continue in the future," Verkasalo summarizes. "Only one thing will remain the same – the consumers themselves."
Verto collects its data from consumers with a digital panel study. The significant invention is the way the collected data is cultivated.
Developing the product and building the data streams took several years. To make the process possible, the company looked for venture capital investors to jump onboard.
In early 2014, Conor Venture Partners was selected.
"For an early-stage company, Verto was searching for quite a sizeable seed funding of two million euros," says Chris Barchak, a partner at Conor's London office.
"We made the first investment and committed ourselves to finding a well-matched partner to complement the funding round."
Conor's networks opened doors to many investors in Finland and abroad, and eventually the software-focused, Finnish Open Ocean Capital was selected.
Verto launched its product in the USA in early 2016 and in little over a year the client pool has grown to include many big names like Facebook, Cisco, Intel, Yahoo and Microsoft.
Among Verto's strengths is the precision and extensiveness of the data produced. Facebook can easily compare its own user data to that of Verto. If the data is an accurate description of their own business they can trust the competitor data as well. Facebook can then base their business plans on the data.
But following competitors is only one of many ways to utilize the data collected by Verto. The possibilities are endless. Verkasalo himself emphasizes advertising as a good example of this.
Let's imagine Pinterest wants to tell its advertisers that a certain target group prefers to look for information on smart televisions through Pinterest instead of other channels. To convince the advertiser, for example the marketing team behind Samsung's latest smart TV, Pinterest needs unbiased data.
Verto offers the data. Lots of it.
According to Verkasalo, without data, companies lack understanding of where they are growing. "Where are they growing faster than their competitors? Where are they weak or strong? What kind of consumers should they target?" he explains.
A long list of big-name clients will give their competitors an incentive to become Verto’s clients themselves. This means that before long, Verto could build a new standard for market data.
Challenging large, well-established competitors requires quite a bit of capital. So far, Verto has accumulated 24 million dollars of it in investments.
The latest round of funding, worth about 16 million dollars, was published in the summer of 2016. New investors include Tesi, Visionplus and EQT Ventures.
"Both venture capital firms and the individuals behind the VC firms are different", says Verkasalo. According to him, all of Verto’s investors have brought a bit of their own special spice to the success story: "For example, Chris [Barchak] understands technology and software and is able to bring added value to the organizational structure and personnel arrangements. With their broad networks, Chris and Conor also helped rope in larger investors."
Verkasalo is quick to compliment other investors as well: "Tom Henriksson from Open Ocean Capital has helped Verto understand how to build a scalable product. EQT is a growth investor and wants to understand if the sales team is up to par, what the compensation models are like and how the company could grow even faster. This is important expertise for us."If Verkasalo had one wish, it would be larger funds and venture capital firms in Finland. This would help entrepreneurs, who can spend up to a third of their year in their search for funding from international investors.
According to Verkasalo, the key rule of the industry is "that about one percent of marketing funds are channeled into the data that channels advertising".
The size of the digital and mobile advertising market is currently valued at about 200 billion dollars. This figure is growing – fast. Verto has estimated its own potential market share to be about 5 billion euros during the next five years.
Above all, Conor's Barchak praises the ambition behind Verto: "We are challenging large, established actors with an aggressive and technically unmatched approach. The uniqueness lies in the fact that we are not only winning market share from our competitors, but also creating completely new, never before seen markets."
The future plans of Verto include, with no set schedule, an IPO. The aim of the company is to weed out competitors from the old world, speeded by digitalization and change in consumer behavior.
If successful, its market value could then reach billions.