According to a recent research, the global digital advertising market is expected to grow at14% CAGR to reach $786.2 billion by 2026. The pandemic lockdowns had driven significant increase in online traffic, and in turn accelerated the opportunities for companies to keep their target audience engaged through digital marketing initiatives. Zeta Global (NYSE:ZETA) is a leading player in the advertising market that is benefiting from this growth.
>>>Sramana Mitra: Let’s double-click down on a couple of issues across your portfolio. What are you seeing by way of successful business models? What appeals to you the most? When you see a company and you’re pattern-matching against the business models that are working, what do you like the most?
Anup Jain: What we like the most is capital efficiency. When we see the way that the market has been approached with a solution that is creating the necessary virality and bringing down future customer acquisition costs, it is the healthiest sign of a business. It means that the initial set of consumers are satisfied. It means that they are passing on referrals to others free of cost to you. That is bringing down the cost of consumer acquisition which points to scalability.
>>>JP discusses his virtual Computer Vision company that spans Germany, Nashville, Islamabad and more, and caters to very large customers in Logistics, Retail, and Healthcare.
Sramana Mitra: Let’s start by introducing our audience to yourself as well as to Darvis.
Jan-Philipp Mohr: I started Darvis about seven years ago. At that time, we were still called Hashplay. We pivoted in 2019. Since then, we concentrated on building the ultimate visibility platform for spaces. We use computer vision to translate the real world into data. We do that in logistics and hospital use cases.
>>>Sramana Mitra: Let’s talk about your portfolio. What are some of the highlights that you’re proud of that are illustrative of how you operate? At what stage did they come to you? Why did you pick them over others?
Anup Jain: I’ll probably start with the principles. All our companies have to cross those barriers. We’re proud of having invested in each one of them. We look at the early stage for the quality of founders and the level of cohesion. When they pitch to us, we look for a well-crafted and well-communicated storyline. That is extremely important. In there is the rational and the emotional stuff.
>>>Sramana Mitra: The bulk of your revenue right now comes from the home security segment.
Yamin Durrani: That’s right.
Sramana Mitra: Based on where you sit, where do you see open problems where new entrepreneurs could come in and build new businesses? Where would you point and steer new entrepreneurs towards?
>>>This report from Gartner identifies four technologies on the Gartner Hype Cycle for Digital Advertising that are expected to have a transformational impact on digital advertising. These include AI for Marketing, Emotion AI, Influence Engineering, and Generative AI. For this week’s posts, click on the paragraph links.
>>>Sramana Mitra: What is the fund size of Orios?
Anup Jain: I would comment on the check size. The check sizes at the seed stages have gone up. In response to that, Orios invests anywhere between $1.5 million to $2.5 million in the seed stage. We look for some degree of data and traction before we make that investment. Pre-seed is an area that is very vibrant.
2021 was one of the high points for India as well. We feel that we should participate given the rate of digital adoption in the economy. Companies are being given the opportunity to scale much faster. They shouldn’t have to come back to investors over shorter periods of time to seek an extension of runways or to conduct experiments.
>>>Sramana Mitra: How do you sell these use cases? How does GE, for instance, sell these use cases?
Yamin Durrani: Not everyone is selling all of these use cases. GE has smart lighting. They want to combine the security angle with the lighting angle. If there is detection of a human being by the camera, then lights should turn on. They can detect if there is nobody present in the room. They could switch off the lights. They can program it for different lighting. The primary goal is security.
Sramana Mitra: This is the OEM strategy mostly through security apps. What about the other verticals that you’re going into?
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