A couple months after Trada launched a crowdsourcing ad platform on Facebook, the Boulder, Co-based start-up has secured some additional funding.
Foundry Group and Google Ventures poured $9 million in Trada's Series D round, bringing the company's total round of funding to $17.5 million since launching in 2008. The Series D round was Foundry Group's fourth investment in Trada. While the company would not disclose the valuation, it was "significantly higher" than the company's last round, said Niel Robertson, founder and CEO, of Trada, in an interview with me.
You may recall from our last write-up, Trada essentially allows businesses to tap into a marketplace of around 2,000 freelance search marketing experts as well as 100 freelance Facebook marketing experts. Companies go to Trada with a budget, such as the price-per-clicks they're willing to pay. Trada then goes to its experts to create the ads and place them. The freelancers will then try to arbitrage by buying the clicks at a lower rate than an advertiser is willing to pay. So, if an advertiser is willing to pay $1 for a click, or a "like" on a Facebook Sponsored story, the freelancer will try to find ways to buy a click for less, say 85 cents. The freelancer keeps the spread, in this case 15 cents, and gives Trada a 25% cut of their fee.
The model appears to be working for the freelancers. Last January, the highest earning marketer (or Optimizer, as they're called by Trada) earned $4,500 in a month. Last month, the top earner made $14,500. In total, about 50 out of its 2,000 "Optimizers" generated $60,000 in a year.
Where are the funds going?
The new Series D funds will go toward three areas, according to Robertson: 1) Expanding partnerships with companies that specialize in SEO (search engine optimization) services, that can re-sell Trada's services for SEM (search engine marketing 2) Building upon the company's core search advertising services 3) Building out its Facebook product line.
From a metric standpoint, the company has high goals as well. The team hopes to grow its advertising budget (the amount of money it manages for advertisers) by seven to 10x by yearend and grow its stable of grapich designers (currently at about 100 on Facebook) by 10x. And, the company hopes to reach profitability in 12 months.
Not surprisingly, the new funding follows an incredibly robust year for Trada, which grew from 30 employees at the start of 2011 to just under 100 today. More importantly, the advertising budgets that Trada handles each month has grown 700% last year. At the start of last year, the largest advertiser had a monthly budget of $35,000 a month. Today, the largest advertiser has a budget of $500,000.