Ever wondered how an advertisement for a new car seems to pop up on your phone at the exact time that you’re thinking about getting a new one? Or how you keep seeing ads for flights that happen to fit perfectly within your holiday budget to destinations you’ve been considering? Chances are, Mobsta had something to do with it.
The core of Mobsta’s business is tracking a panel of 52 million mobile device IDs. They can then use that location data to create audience segments for advertisers. This helps them serve the right content, to the right people, at the right time.
Mobsta is the fastest growing location geo-targeting specialist in the UK. And, with the most accurate location data in the market, they’re on the fast track to becoming number 1.
We caught up with John Scorah, Co-founder and Director, to find out more about Mobsta’s 8-year journey. No stranger to the world of start-ups, this is his 3rd entrepreneurial venture and undoubtedly the most successful.
John’s background is in media advertising, first getting involved in the mobile sector in 2005. With mobiles still using 3G at that stage, sending videos via Bluetooth was still seen as a viable and efficient progression – even ‘the next big thing’.
Four years later, with the rise of the smartphone, more web traffic had migrated from desktop to mobile than ever before. John started working on a project with Darren Kietz who would go on to become Co-founder and Director at Mobsta. It struck them that website owners (publishers) needed specialists that could monetise their mobile inventory in these changing times.
“Most of the major publishers were able to do it themselves for desktop but weren’t really sure where to start with mobile,” explains John. “So that’s where we saw an opportunity. And what we had were the skills, the contacts and the knowledge to start that business at relatively low capital cost.”
By 2010, John and Darren had set up shop in an office off St Martin’s Lane where they were joined by Denise Breslin, who was to become Managing Director, a few months later. It was important to the founders that they would have complete control of the business, so they started Mobsta purely with their own money.
“We were working out of a tiny little office in a small pedestrian passageway called Goodwin’s Court. It was actually used in the Harry Potter films to create Diagon Alley,” John laughs as he tells us. “In that office, we had our first month where we received a £50k cheque, which we photocopied and put on the wall. It was a big deal! There was only 3 of us in a tiny little office running a business that was already making money.”
A bump in the road
By 2015, with the business growing rapidly, Mobsta had started to experience gaps in cash flow. They were buying mobile inventory from US based exchanges which they had to pay for within 30 days. Most of Mobsta’s customers were media agencies that tended to pay them on 60-day terms. These long payments terms had become more difficult to sustain as the business was having to front bigger contracts.
“In reality 60-day terms are nearer 75 days which was a struggle when we were using our own money. Especially because we had gotten to a point where we were having £50k/£70k/£100k months,” John recalls. “That’s when we started to look around at what funding options were available”.
The founders were hesitant to approach the big banks, having been let down by traditional finance in the past. They had moved from their first bank to one that specialises in media and advertising, but the relationship only lasted a few months.
“We thought they would understand the nature of the business and who our customers were but unfortunately that wasn’t the case,” comments John. “We could rarely get hold of anyone and, in my experience, banks just weren’t lending money to small businesses. I guess they’ll offer it when we don’t need it.”
John was familiar with invoice finance and thought it could be a good fit for Mobsta so started looking into new alternative providers.
Bridging the gap
“A lot of these companies talked a good game but when we actually spoke to them either they weren’t prepared to do anything or it was just too restrictive to work,” says John. “So coming to MarketInvoice was a complete eye-opener really. The immediate thing was the platform itself. The user interface just made everything so straightforward and easy. The best bit was not having to trade the whole book – we could just pick and choose invoices”.
Having invoice finance enables Mobsta to realise the value of their outstanding invoices immediately. By advancing funds against their invoices, they can turn them into cash straight away without having to wait for their customers to pay. This comes in handy when they need to cover business overheads or have to make large payments in a hurry.
“With MarketInvoice there’s always someone on the other end of a phone line that you know and that you might speak to 3 times in one day,” John explains. “You have someone you can call and say ‘our next VAT payment is due tomorrow and we need another £50k to make this happen’. There’s no way we could dream of having that conversation with a bank – not at this stage of our development anyway”.
And this stage of their development is a very exciting one at that. From 3 founders in a tiny office, Mobsta now has a team of 20 and a head office in Fitzrovia. They opened a second office in Manchester late last year that has delivered revenue for the business since day one.
The journey ahead
Perhaps the most exciting development for Mobsta is an exclusive deal they’ve renewed with their tech partner, Ericsson. The nature of this partnership is set to evolve to see Mobsta further embedded with Ericsson’s Emodo platform.
When we asked John what we can expect from them in the future, he predicted a potential US expansion and Mobsta firmly becoming the number 1 location business in the UK.
“It will be interesting to see what happens post-Brexit,” adds John. “I think London will remain the European hub for media and advertising but who knows – there might have to be a Mobsta office in Dublin or Berlin. The great thing about being a small and nimble business in control of our own destiny is that we have the agility do something like that quickly if we need to!”