Photo: Randy Stewart
Union Square Ventures partner Fred Wilson is best known for his big, successful bets on Zynga and Twitter.But today, Fred put more money in an online radio ad network called TargetSpot. The startup raised $8 million from USV, Bain, CBS Radio and Milestone Venture Partners.
We caught up with Fred on Skype to ask him about the deal and the company. Here’s the IMterview.
- Hello, Fred!
- Fred: Hey
- Nicholas: Skype, eh? I’m an iChat user mostly
- Fred: I like skype. I find more people use it internationally
- Nicholas: ah, makes sense.
- Nicholas: So ok, we are on the record
- Fred: got it, so I can’t say anything I would regret
- Nicholas: :)
- Nicholas: OK, so, let’s begin!
- Fred: ok
- Nicholas: congrats on the new round! TargetSpot seems to be doing well
- Fred: they are doing well. It’s a category that has been ignored by most entrepreneurs and investors. It’s not very sexy. But I think it’s a big opportunity and they are proving that out
- Nicholas: it’s true. People know you for your big wins in Twitter and zynga. How’d you find TargetSpot and why are you sticking with it for another round?
- Fred: david goodman, who runs CBS digital music business and used to be one of the top execs in their radio business is a long time friend of mine. He basically invented the idea of targetspot because their radio stations were streaming but not monetizing
- Fred: CBS funded the creation of the targetspot platform and then they decided they wanted to spin it out into a standalone business. They asked us if we wanted to fund it and we did
- Nicholas: interesting! I was going to ask why companies like CBS Radio or AOL don’t want to own what TargetSpot does instead of outsourcing it…
- Fred: it’s a network. When you aggregate inventory across multiple radio stations, you can offer marketers both scale and targeting at the same time.
- Nicholas: is streaming radio very big?
- Fred: TargetSpot has something like 100+ inventory providers in their network. You can get the exact numbers from the company
- Fred: its huge. I stream hours a day myself. I vet I stream 40 hours a week if not more. I think something like 75mm internet users in the US stream regularly. And mobile streaming is taking off. This is a gigantic market
- Nicholas: I was actually listening to some of it earlier today. On my iPhone I have a “Radio” folder with two apps in it AOL Radio and Pandora. Pandora is the biggie in the space, isn’t it? Are they a TargetSpot customer?
- Nicholas: Let me put it plainer: Pandora is the giant here. Is that how big an online streamer has to be to not need TargetSpot? Or are they actually a potential customer?
- Fred: Pandora is the biggest “pure internet” audio streamer out there. But I bet they represent less than 20% all of minutes listened. It’s a highly fragmented market. Just today I’ve streamed at last.fm, ex.fm, hype machine, fredwilson.fm a couple CBS radio stations, and wearehunted
- Nicholas: Last Question: Who’s TargetSpot CEO Eyal Goldwerger? What’s his story?
- Fred: I think Pandora will join an audio ad network at some point. Or own one. Or both. The amount of streaming inventory is so large that no one sales organisation can move it all. it is just like display
- Fred: Eyal is a serial CEO. He’s been working in online advertising for a decade. He’s got a great combination of advertising, technology, and management skills. I really like working with him
- Fred: we also have Eric Ronning and Andy Lipset at TargetSpot. They invented the streaming audio ad unit at RL, which they sold to TargetSpot. They are the best audio ad sales guys in the world
- Fred: I have to go now
- Fred: see you later
- Nicholas: See ya Fred! Thank you