Toronto-based adtech startup Cluep raised less than $500,000 from angel investors before selling their company to Impact Group for $40 million ($53 million CAD) this week.
Founded in 2012, Karan Walia, Sobi Walia and Anton Mamonov were just 21, 17 and 16 years old, respectively, when they started the digital advertising platform, which uses artificial intelligence to help brands connect and engage with people based on what they are sharing, how they are feeling and the places they’ve been.
They, being so young, struggled initially to get the company off the ground. At one point, the trio hacked into computers at a university in Toronto to train the neural networks on large amounts of data sets because they didn’t have enough money to buy their own tech. On a shoe-string budget, they would split meals at Popeyes to get by.
“No one wanted to give us money at that time so we had to live off of my student loans,” Walia told TechCrunch. “We did pretty much everything, whether it was programming and building the product, or going out and selling. I was our first sales rep and I was pretty bad early on but I learned.”
Ultimately, Cluep was able to raise enough from angels to pay themselves a salary, hire a few engineers and sales representatives and move into an actual office. From that point, their revenue began growing significantly YoY.
- 2015: $2 million CAD in revenue
- 2016: $6 million CAD in revenue
- 2017: $14.5 million CAD in revenue
- 2018: On track to bring in ~$30 million CAD
They fielded offers from VCs toward the end of 2015 and considered raising a proper Series A round of capital, but ultimately decided staying independent would lead to the best exit.
“This way allowed us to basically maintain control and exit on our terms,” Walia said.
Impact Group, a Boise, Idaho-based grocery sales and marketing agency, will operate Cluep independently.