Viral marketer Unruly raises $25m

Unruly, an online video marketing company that has helped to propel viral hits such as the Evian roller-skating babies and T-Mobile’s royal wedding spoof to millions of views, has raised $25m (£16m) in venture funding to accelerate growth and international expansion.

The investment comes from European firms Amadeus Capital Partners, Van den Ende & Deitmers and Business Growth Fund, after Unruly turned down approaches from several US venture groups.

It is the first time Unruly, which has been profitable and cash-generative for three years, has raised external capital. The London company, which claims a distribution network of 725m unique users, has trebled its revenues during each of the past three years to reach an annualised run rate of $50m in sales.

“The web has been for a year or two essentially a video medium,” said Scott Button, Unruly’s chief executive and co-founder. “Video viewership on the web is just massive and ... that is driving brand dollars. We want to be as big and as global in footprint as we can be as fast as possible. [The fundraising] is really about grabbing share and locking up the top of the market and getting much bigger than our competitors.”

Unruly, which operates in the “Silicon Roundabout” area of Shoreditch in central London, has opened offices in New York and San Francisco, with plans to expand into Chicago, Berlin and Singapore.

The company has 11,000 media partners who carry its videos, ranging from big publishers such as IPC and Bauer, to Facebook application developers and small bloggers. It uses this distribution network to “seed” viral videos, which are often similar to commercials which run on broadcast television.

Unruly has data on how videos percolate through the web going back to 2006, allowing it to identify the right places to seed for particular clients, which also include Heineken, Google, Burger King and Adidas.

Torch Partners advised Unruly on its fundraising, which is estimated to value the company in the hundreds of millions of dollars.

“Unruly’s proprietary technology platform and aggressive global growth strategy in a fast-growing market is really impressive,” said Richard Anton, partner at Amadeus Capital Partners, an investor that has previously backed Plastic Logic, Icera and Lastminute.com.

“With global online ad spend set to reach $110bn by 2014, representing more than 20 per cent of total ad spend, and online video ad spend predicted to be the fastest growing category, we believe Unruly is strongly positioned to be the winner in the global social video market,” said Martijn Hamann, partner at Van den Ende & Deitmers, a Dutch firm founded by veterans of Endemol, the TV production company behind Big Brother and Deal or No Deal.