In early May the Swedish media technology company Signia Group announced the acquisition of Setupad, the Latvian adtech company, marking the first Latvian adtech exit. The startup, which has been active for two years, is lead by founder Toms Panders. We spoke to him to talk about the experience of selling his startup.
Setupad is an adtech startup that uses different optimisation techniques to implement programmatic advertising, particularly with a focus on international visitors and displaying relevant ads to the visitor. Setupad was recently sold to the Swedish media technology company, Signia Group, for an undisclosed amount. We sat down with founder Toms Panders to find out more about his startup, what inspires him, and suggestions for future entrepreneurs.
Where did the idea for Setupad come from?
I had been working in the advertising industry for several years, so I didn't want to start something drastically different to that. I had an undeniable desire to create my own business, big or small it didn't matter, I just wanted something that was my own. I had just gotten the inspiration for my business while studying my Master's at the Royal Institute of Technology (KTH) of Stockholm. Everything really started from a great desire and need for alternative career opportunities, because there simply weren't any other good options.
How were the early days of the company? How did you work, where did you find your first clients?
At the moment for the most part I was abroad, and for that reason I noticed an opportunity - to improve advertisements that are shown to site visitors abroad. Many publishers only show local ads, even though they're irrelevant for users in different countries. I knew that all of the necessary technologies to create ads that would be relevant to the audience were available, but implementing them wasn't a priority for the publishers. Knowing that, I started experimenting with systems available to me that I knew my way around well. I didn't ever expect that I'd be able to create a sustainable business from it. It helped having personal contacts in Latvia from progressive media that had similar mindsets. As a result we realized that this has potential both for me, as well as for the clients. Together with my first client we created a minimum viable product that I continued to develop. Seeing that I had created value as well as a modest turnaround for the company, I decided to take the risk and dive in full-time. I moved back to Riga and continued to build my startup from my office, which was my apartment's kitchen. I still like working there.
How did Setupad reach an exit? Were you actively working towards it?
As I mentioned before, I've been working in the advertising industry for several years. I got to know Signia while I was studying in Stockholm, writing my Master's thesis. For the next years we kept in contact and occasionally met up at conferences. I found their company vision and working style quite attractive - it isn't afraid of looking past the horizon and to strongly defend the local media interests. Setupad continued to develop until it captured a more serious interest from Signia and they offered us to join them. That coincided with the moment when we had decided that we wanted to expand internationally and we realized we wouldn't be able to do that on our own.
What was the exit process like?
Of course there were long discussions and multiple visits until both companies understood each other and were confident in the compatibility. I was personally more interested in the vision and development opportunities than gaining short-term benefit, and maybe that's why we were able to agree to a model of co-operation. Of course, by definition it's an exit, merging into a larger company. Plus it's the first Latvian adtech exit, to my knowledge.
What's next for Setupad and for you?
Some exciting plans are ahead of us, that we'll still have to work hard for. Our ambitions have grown, so it's good that we're now a part of a global company that has offices in Riga, Gdansk, Stockholm and Melbourne. This is a moment in time that a lot of connections are being established between the platforms in the advertising technology industry, which is why it's important to stay open rather than closing yourself off from the rest of the adtech world. The winners of this in a concrete monetary form will certainly be our main client audience - the local media. I think that our clients in the Baltics will agree if I say that we've been able to successfully deliver increasingly better results, and they'll without a doubt continue to grow.
What would be your advice to someone who wants to create their own company and successfully exit?
Solve a concrete problem, learn to profit from it and enthusiastically devote all of your time to it.
Where do you think lays the key to your success?
I've always been captivated by the process. Of course before that there has to be solid planning, but you have to go out and test it with real clients. Maybe that's why I've grown a thick skin, because I work in sales and I know that you have to keep trying. You also shouldn't be too quick to make a u-turn, because often clients start to believe in you only once you've proven that you're ready to stand behind your ideas, no matter what.