Today, Oracle announced that it is acquiring BlueKai, the leading data management SaaS provider for digital marketers, and a Redpoint portfolio company. Congratulations to the BlueKai team and to Oracle on a terrific combination.
As an early stage VC, this is the kind of investment I live for, and I’m not talking about the financial return (though that is certainly good too) — I’m talking about the ride. From the earliest identification of a market opportunity, to the recruitment of an extraordinarily talented team, to the twists and turns along the way in finding the real business, to the acknowledgement in the end that we’ve helped shape an emerging leader in a market that matters.
Taking a moment to look back, I have a few highlights of the ride with BlueKai – similar moments most startups see in their often challenging road to success.
Seeing the opportunity early
We were lucky to have been the only VC investor in Right Media, and to have seen the programmatic display ad market happening earlier than most. If programmatic was going to be big, then audience data would be critical to informing marketer’s ad buying decisions, maybe even more important than the page context itself. Then in 2007 Google bought Doubleclick, Yahoo bought Right Media, and the programmatic ad race was on. Marketers and publishers would need to leverage audience data to take advantage of this shift.
It was clear: we needed to find an audience data platform play – before someone else did.
Confluence of talent: finding the right team
I met Omar Tawakol (now CEO of BlueKai) in a search process for one of my companies and was immediately blown away. He possessed the rare combination of technical chops, product discipline, strategic vision and salesmanship. If you’ve met him, you know exactly what I mean. Fortunately he declined the job offer we had discussed, and we agreed to stay in touch regarding future opportunities to work together. I subsequently introduced Omar to Alex Hooshmand (now BlueKai’s head of product) with whom I had worked at Right Media. I connected them with a simple, “You guys should talk!” With a bit of cajoling, Grant Ries and Mike Bigby hopped aboard, and completed the perfect founding team to go after the opportunity. For this market, attracting the right the team was just as important as building the right product, and in this case both were perfectly aligned.
Of course when the moment came, our answer was simple: Heck yes, we’ll invest!
Twists and Turns: Making the right calls at the right time
Three years into the ride, we realized that the audience data exchange BlueKai had developed was only one piece of the puzzle. As liquidity continued to grow within the exchange, marketers and publishers started asking if they could leverage BlueKai’s platform to manage their own data assets. We became convinced that this software play could be as important an opportunity as the exchange, but to pursue it would mean a shift in strategy and business model, significant team changes, and the need for additional capital to fund what was an intriguing, but unproven model. A huge risk was in front of the team and it was a challenging, and ultimately, defining moment.
Defining a market
The BlueKai team acted decisively: quickly doing another financing, transitioning the go-to-market team from media-centric to SaaS-centric, and repositioning BlueKai as a SaaS platform for marketers and publishers. Fast forward two and a half years, and BlueKai has defined a new marketing SaaS category – the data management platform – and positioned itself as the emerging leader in the space. A marquee list of online marketers and publishers adopted the BlueKai DMP platform to power audience-driven marketing activities across their websites, social media platforms, mobile, the Web and beyond. And today’s announcement of the acquisition of BlueKai by Oracle further validates the importance and scale of the market opportunity.
The BlueKai team is an amazing example for startups at the challenging and defining points in their journey. Their story is a good reminder for founders to listen carefully to what the market is telling you, and to be bold enough to adjust course in response to the feedback.
Congratulations again to the BlueKai team – and thanks for an amazing ride.