Passendo, an email adtech company, has announced a €2.3 million pre-Series A investment led by Amsterdam-based Newion and UK-based FirstPartyCapital that will help them consolidate the service in Europe and begin their expansion into the US.
An innovative ad service, Passendo reconciles increasing consumer concerns about privacy with providing relevant advertising. Providing a unique way to present targeted ad content without ‘spying’ on customers, it allows publishers to generate revenue streams from their emails and newsletters.
A solution that combines advertising and privacy
Passendo was founded by Anders Rasmussen and Andreas Jürgensen. The pair met when they overlapped at the full-service marketing agency Ad Pepper. Rasmussen worked there in sales, leading the teams covering the Nordic region. Jürgensen joined a few years before Rasmussen left, and eventually became Ad Pepper’s Chief Technology Officer.
Collectively they have decades of experience in advertising, but Jürgensen, now Passendo’s CEO, intended to take a career break when he bumped into Rasmussen again on his last day, and it changed his plans. “I met Andreas in the hallway,” Jürgensen told TFN, “and I wouldn’t say it completely ruined my sabbatical, but it replaced some of the diving and travelling to Bali with development and coding instead.”
Passendo was founded in 2016 and seeks to transform email advertising. Traditional ad servers do not work in email in the way they do on the web. And with consumers increasingly concerned about online privacy and tracking, businesses are reluctant to use a solution that breaches the inherent trust in receiving and opening email.
When an email is opened, it contacts the Passendo server, and that server decides on the ad to deliver based on what the sender knows about the individual. But what is important, Jürgensen explains, is what Passendo does not do. “We’re not selling your data left and right, we are not putting cookies in place that will endanger your privacy,” he says. “It’s all being done in a trusted relationship between our technology stack, and the sender and recipient of the email. Basically, our technology that chooses the right ad at the right time.”
A unique service
Despite being one of the oldest, and biggest, features of the internet, email has developed relatively little. While they might look prettier than they did in the internet’s early days, the underlying protocols have changed little and email is still, largely, a text-based medium.
This lack of innovation means that Passendo has few competitors. The main ones, both based in the US, operate on a very different model, Jürgensen says, simply providing a code that displays adverts. Passendo, on the other hand, takes a different approach. “We are a European company, so we respect the data going back and forth. And we hand the control to the publisher,” Jürgensen says.
This has presented a challenge for Passendo because their clients have never thought about the commercial opportunities of email. “When we talk to large publishers, it’s a big project for them, it creates new products that they have to sell. A lot of the time we’re working almost as consultants for our biggest clients, helping them on the journey to commercialise newsletters.” The service has met with some early successes. IDG, for example, saw a 454% increase in revenue after using Passendo.
Investment in the future of email
Email has regularly faced predictions of its death at the hands of other services, but it remains the main form of communication on the internet. Passendo’s work has excited its investors, who were found after a long search by Rasmussen and Jürgensen. Meeting 70 funds and angels over a year, they were impressed by Newion and FirstPartyCapital.
“We immediately fell in love with their no-nonsense approach,” Jürgensen explains. “First of all, they understood what we were doing. They liked our numbers. They liked us. And they provided us with raw feedback.”
The feeling was mutual, Newton Partner John Sjölander praises Passendo as a team that that will “enable the next generation of advertising for the oldest and largest application on the internet.” And FirstPartyCapital’s Managing Partner Rich Ashton highlights that, “Passendo offers a focused solution that neither Google nor any other adtech company can deliver.”
And the future is looking positive for Passendo. With the rise of newsletters on the internet, there has been a resurgence of interest in email and how it can be used commercially. Their immediate plans are to consolidate their European operations, and start testing the US market, where they have already been receiving unsolicited markets.
They are also working with several high-profile clients in the markets where they operate, big names with well-developed commercial strategies. “They’re well known in their markets.” But Jürgensen is also playing Passendo’s cards close to his chest, only hinting at what’s to come: “Ask me in a year!” he told us.
