In June, Kevel announced the acquisition of Velocidi, an audience segmentation and customer data platform. James Avery, Kevel's founder and CEO, traveled to Porto, Portugal to meet the Velocidi team at their headquarters.
James sat down with Paulo Cunha, Velocidi's CEO, for a conversation about all things acquisition, the state of adtech and martech, and hopes for the future. Watch the interview below, or read on for a transcript of the discussion.
(Interview has been lightly edited and condensed for clarity.)
PAULO CUNHA: Hi James.
JAMES AVERY: My name is James Avery. I’m the founder and CEO of Kevel. Kevel is an API infrastructure company and we work with hundreds of different partners who build their ad platforms on top of our APIs.
PC: Hi, my name is Paulo. I'm the CEO of Velocidi, a first-party customer data platform that helps brands and retailers take back their own data, create better marketing strategies, and grow their business through better audience segmentation.
JA: And we're here today because we've joined forces.
PC: James, we met each other - it's a great question because the first time we spoke I think was 2011. A long time ago, Velocidi’s background was digital advertising consulting, and Adzerk has been on my personal radar for over ten years. There were not many people trying to create the foundational infrastructure for people to build their own ad platform. Doing your own thing was not a thing in 2011.
JA: Well back in 2011, we were like 10 people, but you did find the email you sent us in 2011 to our then VP of Sales, now VP of Sales Americas, Ron Nelson. Yes, he's still with us - which is great - we could rekindle that by just replying to the email and see if we can get going.
JA: We work a lot with our customers; we hear a lot of feedback from our customers, and one thing we kept hearing over and over again was ‘How do we bring more and more of our first-party data to bear into our ad platforms?’
When a company builds an ad platform, one of the really unique things that they can do is use first-party data. As a company we've always been very privacy focused, so for us first-party data or any personal consumer data is very sensitive. As we were looking around in the market, we found this company, Velocidi, who had taken a very unique approach to both pulling in first-party data but also doing it in a very privacy-centric way. Then as I got to know Paulo, I realized we're very similar in how we thought about the market. How we thought about how privacy is very important, and felt like it was a perfect match. From our customers, we knew that we had to improve our platform around first party-data, and this acquisition is a perfect opportunity for that.
I'll also say that with any acquisition, there’s the question 'Is it the right time for an acquisition?' A lot of it comes down to the people - are you adding people that you know you're going to get along with and work well with and that would be really great for the team? I think from early on, Paulo and I had good back-and-forth rapport and conversation from working through different deals, so we knew it would be a great match.
Velocidi has always strived to get people to use their first-party data, and one of the challenges we've always had was that we couldn't. We wanted people to do more with on-site personalization and on-site campaign management, and we've always struggled to get either. We couldn't even find other partners or technologies that could enable our customers to leverage that data in that way.
So we saw Kevel as the opportunity to do the ‘one plus one is more than three’ thing - it's bringing the potential functionality that can be created from an ad server to be used - from a brand marketer’s perspective - on-site for personalization and other bits.
It's only been a few days since the actual acquisition happened, but by talking to customers, we immediately see there's an opportunity for that. As a brand, Kevel has a great reputation in the market. We think those two pieces combined are really what made a lot of sense for our business. We’ve already seen that in reality the last few days when talking to the first customers about this - they got excited. When you have customers excited about that opportunity, you know you're doing the right thing.
JA: What are you most excited about?
PC: Doing that exactly. I'm most excited about bringing something to market that hasn't ever been made before. We really align with the idea that everyone - every business - should have a higher degree of control over their business, data, and customers. I think that's our alignment.
Being able to come to market together with those joint offerings - with those opportunities to create products that are very safe, privacy-first - that's what really excites me because I think that's the present, not even the future, and the market is totally underserved by that sort of technology.
JA: I think the thing that's really exciting about the acquisition is that it is going to be good for both sets of our customers. Customers that are currently building on Kevel's APIs will now have access to this very powerful data platform to bring in their first-party data and automatically generate new segments and new optimizations. Then we look at a lot of Velocidi's customers - they will be able to bring in some of the power of the Kevel's APIs to do things like on-site personalization, and more.
PC: Our customers that are building their own adtech or martech stack were using Velocidi as just a component for the marketing data parts. It would definitely be interesting exploring more possibilities with the Kevel APIs because they'll now be able to do more in a single place.
I think that at the end of the day, most enterprise customers are looking for simplicity and I think this will bring them simplicity. Our customers would love the ability to leverage advertising, on-site personalization, and e-commerce retail media all in one place. Anyone who wants to do anything related to these areas in one place with a single view - in a way - of the entire stack will be able to build their own retail media strategy component by component without having to do additional integration checks. Because we know we're going to integrate. Because it's already integrated, right? That's the whole starting point.
So that's why I think it's the biggest opportunity for our current customers, but also I'm excited about the future customers. I believe it would’ve been harder for us to acquire future customer] as an independent business, especially mid- to higher-end enterprise customers.
Now we can leverage the additional Kevel office locations, and additional resources across sales, customer success, and marketing. I think that's something that would’ve taken us years to achieve from the business perspective, and we're just accelerating that opportunity. I think it's really exciting.
JA: So we've taken the approach of having independent components that our customers can use to kind of build their ideal ad platform or martech stack. So in this case, Velocidi will be basically a product org. So we'll be getting a new name which we're not ready to announce yet--
PC: Are we not?
JA: No, not yet. Not yet.
While it operates as a separate product org, our sales team and marketing team will be able to work and provide support across all products. The strong product and engineering group that's been built here in Porto will stay together as a group in the company.
PC: On the cultural side of things, it's so fascinating because Adzerk, and now Kevel, have been an inspiration in many ways to Velocidi. Especially around the cultural alignment and motto. This is one of the pieces that has been very relevant for us, especially as we have been talking for a very long time.
PC: Digital advertising has been changing recently to be a lot more privacy friendly. This is a good thing. With that, brands are trying to understand what they can do. Taking back their data has been our approach and what we are solving, but with Kevel it's more than just bringing back the data - it's about bringing back the opportunity to create their own business - especially in the retail media space.
You need a good core ad serving platform, and good data infrastructure with customer analytics and machine learning. Combining Kevel and Velocidi now makes that possible. You have a single place where you can create your own business that’s more than just data control. This is about ensuring that your business is in business in the long term, because that has over time been demonstrated by major players like Amazon and Netflix that if you really own your data, you can really succeed because you're the captain of your ship. No one else is dictating how and where you're heading. So, I think this is the future. You're watching the future happen.
JA: I think that it really comes down to us seeing a lot of changes in the industry and one of the big ones is companies building their own ad platforms. It usually takes a lot of work, time, and effort.
Everything that Kevel can build and provide is one less thing a company has to go figure out for themselves. So I think that every time we ship a new feature or acquire a company or whatever it is, that we're helping those people be able to build an ad platform with less resources in less time, which will be a big shift in the advertising industry over time.
JA: Yeah and as we talk about the industry, I think we will have the opportunity to make more acquisitions in the future as we look at having all the components that go into building a successful ad platform. So, I don't think this will be the last one but I don't know that we'll have one any time in the short future.
JA: I did. I had a 'francesinha'. I don't know how to pronounce it. Yes, this delicious sandwich in Porto. Mine was a vegetarian one but it was very good. I learned that after you order it and it comes out, you take your fries and you dump it in the sauce and then you ask for more sauce.
What I witnessed the other night when we went out was how cranky someone from Porto gets if that sauce doesn't come out quickly enough. I witnessed some very unhappy people as they waited for that sauce as they stared at their sandwich with not enough sauce.
PC: Sauce is important.