Regina Ye was a salesperson at Shopify when she was in college and remembers being so fed up with ad solutions that she spent the last week learning how Facebook and Amazon ads work.
“It was very difficult,” she told gaming-updates. “I was one of the first users of B2B marketplaces, but advertising was that black box. I had no idea how much I would have to do as a salesperson.”
He was frustrated by two things: first, the complex structure of how to effectively monetize these channels, and second, the lack of direct promotion tools provided by the retail channels he sold, which he felt were less saturated. be competitors. Compared to Facebook and Google.
While working as a product manager at Hopein’ Yeh, he met Stanford University professor Michael Ostrovsky, an expert in market design and auction theory, and Francisco Laren, a serial entrepreneur who left Groupon early to enter engineering.
As changes in user privacy affect more and more markets, the group is looking for ways to innovate in this area without affecting privacy. They studied Ostrovsky’s work in the auction business and together launched Topsort in 2021 to provide API-based auction-based advertising technology to make it easier for small retailers and merchants to advertise without relying on Go cookies that are about to disappear. ,
His approach is a retail media technology that uses auctions as a way to create effective advertising for small businesses. When a user installs the API, they can run a campaign, including sponsored listings, banner ads, and video ads, as well as control how ads are displayed, how ad quality and relevancy are measured, and who can run a campaign. Laren says the auction runs in just 20 milliseconds at a rate of 10,000 requests per second.
When considering how much to bid per click, Topsort suggests using proprietary algorithms to maximize clicks and conversions. It also has an automatic bidding feature for pay-per-click advertising so that vendors can enter a budget and time period and the company will take care of those features. Ye said that it could guarantee returns of two to four times depending on the market.
“I don’t agree that advertising should be a guessing game,” E said. “It’s a really neat way to advertise, and we’re filling a gap without privacy data, but with math and machine learning. What sets us apart is how simple it is, which is why ad tech has traditionally gotten a bad rap.”
Over the past four months, Topsort has won the majority of its customers, some of which have already generated between $1 billion and $15 billion in gross commercial value.
One of the first customers was Babytuto, a parent-child retailer in Chile that initially partnered with the company on Cyber Monday. Based on reaching a 40 percent vendor acceptance rate, Topsort explained in their case study that “Based on vendor performance, the performance of this batch of sponsored offerings, and market characteristics, we expect promoted listings on Babytuto to eventually lead to additional adoption. a profit equal to approximately 5% of their gross commercial value.
They say the company has learned a lot from Babytuto and dozens of its other early customers, including Yummy, Facility, Airlift and Chipper, and is trying to accelerate growth and scale its go-to-market strategy.
The company has raised $8 million in seed funding, giving the company a whopping $110 million. The round includes investments from market investors including Peer Ventures, Quiet Capital, FJLabs, Mickey Malka (Ribit Capital), Lydia Jet (SoftBank), Akhil Paul, Comma VC and a group of individual investors.
Yeh and Larrain say the new funding will be used to develop the sales and marketing team and expand Topsort’s presence in Latin America and Asia.
“We are approaching the point where we have gone from zero to one, and the number of all investors has doubled,” said E. “We hit our clients before they did, but we would like to do it as soon as possible. This area is so misunderstood and we want to do more user education and offer different product lines to help get started in smaller markets because we all work in different markets at different scales. ,