Growth, growth, growth – there is surely only one keyword for Berlin’s startups in 2013. And while that may sound a bit obvious where the many early-stage companies in the German capital are concerned, it’s surely time for the handful of more established names to put the scene here on the map in a global sense.
One of those established names – well, founded in 2009 is established by Berlin standards – is SponsorPay. The value-exchange advertising platform has become increasingly concentrated on mobile in its mission to help companies acquire high-quality users. Co-founder and chief revenue officer Janis Zech sat down with Silicon Allee to discuss how Berlin matches up as a tech scene on a global scale.
SILICON ALLEE: How was 2012 for SponsorPay?
JANIS ZECH: We had a great year last year – we transitioned the company from an online advertising company to a mobile advertising company; now mobile is accounting for more than 60 percent of our total revenues. We’ve grown our US presence significantly, up to 15 people across San Francisco, Los Angeles and New York, and are running a lot of cost-per-install, cost-per-engagement advertising campaigns for players from the mobile industry.
SA: How important is your presence in the US?
JZ: In Silicon Valley, the ecosystem there is key for mobile right now, and it seems that all the big platforms are there as well as a lot of app developers, and everybody who is not there goes regularly to meet up with everyone else. So it is really, really central, and this year we will continue to expand further in APEC so Japan, South Korea and China, which also has a very vibrant app development ecosystem.
SA: SponsorPay is one of a relatively small number of startups from Berlin which are more than a couple of years old – in your case, founded in 2009 and now with more than 130 employees. What do these companies need to do in the coming year?
JZ: It’s super important that we generate global players here in Berlin, especially companies which become the market leader on a global scale and start to acquire other companies. It’s something that is vital for the overall tech community and startup ecosystem here in Berlin, although there are other topics which are also important in continuing to foster the growth of the European tech scene.
SA: What do you make of that growth?
JZ: First and foremost, I am really excited about the way the whole scene is developing. I think it’s great that entrepreneurship is becoming a mass phenomena where it is to a certain extent hip to start companies. Nevertheless, we need more success from Berlin, and that is something which will develop as more people start companies, and also as more people fail and then do something else in this industry.
SA: Do you still feel part of the startup scene here in Berlin?
JZ: We are definitely part of the ecosystem; we meet a lot of younger entrepreneurs and talk to them and try to share our learnings and also get feedback from their side, because it is not as though we know everything and they don’t. I think the overall scene is developing well, although it is a little bit overhyped, maybe, and as I say, we need to have more global successes to emphasize that this is really the main hub in Europe.
SA: So there needs to be more meat behind the hype?
JZ: That’s nicely put.
SA: What about investment? Is Berlin lacking in that area? Do startups here have to start looking to the US when the sums involved become larger?
JZ: There is a lot of talk about Berlin; I think we should see it more as Europe, because in the end it would be better if we unite ourselves as European and look at the landscape here because what is happening in Asia is just amazingly fast. I think that is where a lot of innovation will come from in the next decades. And obviously the US is already very strong. If you look at Europe, it depends a little bit on what you want to do – if you want to raise above €10 million, it is possible in Europe, for sure, and the Samwers especially have shown that. But I guess the question is more who can not only provide you with money but smart money, and help you to scale your business – and then I think certain VCs in the Valley might help you further to do that. But we are not VC-funded from Silicon Valley.
SA: But maybe in the future…
JZ: Well, the future is something unknown, so let’s see!
SA: Nicely dodged. So what about Asia? Surely China has the best potential for growth when you consider the US as a huge but mature and competitive market?
JZ: I think China is high risk, high return… China is a wonderful upside for us, but if we fail [there] it’s also fine. For us the US is much more crucial, but nevertheless we will open an office in China this year. We are very excited about Asia in general and especially South Korea, Japan and China.
SA: Do you think you will have success in Asia?
JZ: Asian markets in general are very comparable to Europe; there are different languages, very different ecosystems, it’s very hard to break in as foreign companies. If you scale a company in Europe, you have to be local; it’s very hard to have English people running around Paris, it’s very hard to have German people selling to English companies. You need to be native and local. And I think that holds true for Asia and the different markets there, and that is something that US companies don’t understand as well as European companies from my point of view, and that is a huge potential advantage because more will shift to the east than the west in future.
SA: What can we expect from SponsorPay in the coming months?
JZ: There are two major things we are working on right now: We are trying to solve the problem of trying to acquire new users profitably on iOS and Android, and also Facebook, and the second is how we can allocate brand budgets into apps and games across those three platforms. We have become a technology company, so we are working on making the whole value exchange advertising model more as an RTB (Real Time Bidding) exchange model which is fully automated, where we plug in hundreds of ad networks, DSPs, agencies and the platform optimizes the yield for our publishers.