Canadian Startup Datacratic on Raising Money, Solving Problems, and Achieving Goals

by Louis Rheaume | Startups

Montreal's Datacratic is a software data analysis company that applies machine learning and predictive modeling to real-time consumer behaviour.

As the consumer web moves to a new paradigm traditional data analysis tools can't keep up. The proliferation of real-time data flows means that new ways of extracting value from data are required. Datacratic has built a scalable platform which uses machine learning algorithms to train predictive models on real-time data.

Models are continuously updated and re-trained meaning that new data sources are automatically taken into account and the models never decay or get stale. The end results are real-time predictions which are made available to a number of different applications.

Datacratic has been using its platform to build and deploy applications for the real-time marketing and ad technology vertical. The challenges with real-time data are particularly acute in that sector as more and more advertising impressions are traded on real-time exchanges like the App Nexus powered Microsoft Advertising Exchange and Google's Doubleclick Ad Exchange. Datacratic has built several SaaS applications, while licensing them to Ad Networks, Demand Side Platforms, Data Management Platforms and Ad Agency Trading Desks.

We conducted an interview with the CEO of Datacratic, James Prudhomme.

LOUIS: Can you describe your investors and your recent financing?

JAMES: Our last round of financing actually closed in December 2011. It just took us a while to make the announcement.

Real Ventures Montreal came on board with a seed investment in February of 2010. They followed on a subsequent round in December 2011 which was lead by BDC Ventures. Real are very focused on early stage investments and like to be the first money into a company. They made an investment decision based on our founder's back of the napkin idea and did a great job of shepherding the company through its early R&D phase.

As the product and business strategy started to coalesce we were thrilled to bring on BDC in a subsequent round. They have a large portfolio and a very experienced and well connected team. To date the company has taken slightly less than $2 million in equity financing and we are preparing to raise more funds later this year.

LOUIS: What kind of customers do you have ? What segments of the market of big data do you focus?

JAMES: At the moment we are focused primarily on the US market and are beginning to scope opportunities in Europe. Canada has not been a priority for us to date, though we do have some clients here.

Our customers are technology driven advertising companies, e-commerce web sites, ad networks etc. We recently signed an agreement with Blue Kau. They're a provider of third party data and data management solutions to the digital marketing and advertising business. We also have deals in place with Ad Gear and [Canadian startup] Beyond the Rack.

LOUIS: Can you describe a typical case study where your solutions provided great value to a customer?

JAMES: Ad Gear is probably a good example to look at. They have been in the business of providing technology solutions for digital display advertising for several years. Their platform is used by publishers and advertisers to manage the massive complexity of deploying digital display advertising campaigns on web sites, mobile apps and in front of video streams. As the buying and selling of these ads began to migrate to real-time advertising exchanges, Ad Gear needed a solution which could be integrated into their platform and which could allow their users to take advantage of the opportunity with Real Time Bidding.

We worked with them to integrate our bid optimization application into their RTB stack. Our stuff is used to provide real-time impression level decisioning. For each real-time bid request our platform is able to model the projected ROI for the advertiser; we also model how we expect the other bidders in the auction to react. The application then makes a bid decision based on the surplus between value and price and passes that decision over to Ad Gear who then submits it to the exchange.

Ad Gear is now fully enabled to offer their ad agency and advertiser clients the ability to buy ads in real-time from App Nexus, Google's Doubleclick Ad Exchange, Casale X and others. They have blue chip advertisers like Aeroplan, Cheerios, Canada Post and others who have all seen great results from their Datacratic powered RTB campaigns.

LOUIS: Datacatric has how many employees?

JAMES: We currently have close to 15 employees and we are hiring.

LOUIS: What are your future objectives?

JAMES: We have a plan to achieve operating profitability two years from now at the end of 2014. Our immediate objectives are to continue focusing on our core platform technology and also to continue innovating at the product level.

Montréal, Québec, Canada

Datacratic is software company that applies real-time machine learning and predictive modeling to big data generated from consumer behavior. Datacratic provides optimization for Data Management Platforms (DMPs), Demand Side Platforms (DSPs), Agency Trading Desks (ATDs), e-commerce web sites and others in the real-time marketing ecosystem. Originally founded as Recoset in February 2010 and... more

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Louis Rheaume

Louis Rheaume

Mr. Rhéaume has the scholarity of a doctorate in business administration, concentration in strategic management, innovation management and corporate finance. He holds a Master’s degree in finance. He has numerous years of experience in consulting, strategy, financial analysis and business intelligence, mainly in the telecommunications and computing industries. He has also been a researcher in... more

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