On April 10, Chicago-based startup PopularPays announced the closing of its Series A funding round with a total of $5.2 million raised. The company raised just over $2 million in Series A funding in 2015 and an additional $3.1 million this year to reach the total. They intend to use the funds to enhance their technology suite and grow the business. The funding round was led by GoAhead Ventures and saw participation from Hyde Park Angels, Pallasite Ventures, and quite a few individuals from the Chicago area.
PopularPays, a graduate of startup accelerator Y Combinator, was founded in 2013 by Nathan Michael and company CEO, Corbett Drummey. Initially, they focused on connecting businesses with Instagram influencers, but, in the past couple years they’ve made the switch to focusing on connecting businesses with content creators, not just influencers.
Mr. Drummey explains, “In 2015 and 2016, we realized that brands came for impressions but that they stayed for the content because they liked the creativity. Brands can easily buy ads on social media, but it’s hard to create enough good content to fill those ad buys. Now we’re re-crafting our products to be more suited for the content creators.”
The company hasn’t completely abandoned the influencer model, however. Instead, they now provide a combination of content creation and publishing on influencer’s pages.
Since the switch, PP has completed nearly 600 campaigns for over 300 brands and agencies which include industry giants like Bose and Havas Worldwide. Last year alone the company produced 3,209 posts which reached 328 million viewers. You won’t just find PP’s content on social media though. According to Drummey, their content has also been displayed in websites, restaurant menus, and even a few billboards in Times Square.
Drummey also pointed out that PP provides more than simple content creation and publishing. Their technology suite allows for A/B or split testing of campaigns and makes it easier for marketers to manage their collaborators(which can number in the hundreds for large campaigns). They also license their technology suite to companies and provide reseller services – which amount to 1/3 of the company’s revenue.
2016 saw PP break even financially, however, the future looks promising for the young company. Mr. Drummey said, “The raise here, it was an acknowledgment that we found the right business, we found the right image and brand here.”
With the close of their Series A funding round, PP hopes to add 12-15 new employees to their 24 man roster. The hires will be split almost evenly between engineering, sales, and customer service. Currently, all but 3 of PP’s employees are based in Chicago and it’s expected that the majority of new hires will be as well. “I have a lot of friends from Y Combinator who talk about the bloodbath of recruiting in Silicon Valley,” Drummey remarked. “I don’t think we could have built the same company if we were in a different city… At least not without raising a lot more money.”