Boston-based DataXu, whose technology aims to improve digital marketing decisions using machine learning and “big data,” said Thursday it has raised $27 million in new funding to support the firm’s global expansion and further its technology development.
DataXu co-founder Bruce Journey said in December that the company expected to receive more than $60 million in revenue for 2012, for its system which aims to get the largest return-on-investment possible from digital ad placement.
The new funding was led by Thomvest Ventures, headed by founder and managing director Peter Thomson, a director of Thomson Reuters (NYSE:TRI). In a news release, Thomson said DataXu is “on a trajectory to become the next great enterprise software company.”
Firm managing director Stefan Clulow will join the board at DataXu in connection with the funding.
Also participating in the round were ongoing investors Atlas Venture, Flybridge Capital Partners and Menlo Ventures. The funding brings DataXu to $65 million in venture capital raised since its founding in 2007.
The firm reports serving more than 700 brands, with main industries including automotive, financial services, consumer packaged goods and business technology. DataXu has disclosed few names of customers, though automaker Ford (NYSE: F) is on the list.
The company has 11 offices in eight countries, and has been evaluating whether it will expand into Asia-Pacific this year, according to Journey, who is the firm’s international managing director.
Forrester Research has projected that online advertising spending in the U.S. would reach $17 billion in 2012, and grow to $27 billion annually by 2017. While digital advertising has continued to grow rapidly, “we haven’t seen the real money shift yet,” Journey said in December.
“In the next three years, that’s where you will see the big movement from traditional advertising into digital,” he said. “Consumers are going to drive this, and marketers will follow.”
DataXu’s system works by looking at data on how consumers have interacted with a customer’s Internet assets and creating a unique algorithm — sometimes described by the company as a “mini valuation machine” — for that customer.
DataXu then makes bids for digital ads for the customer based on the algorithm, and chooses content of the ads deemed likely to lead to a consumer conversion — all of which happens in about 10 milliseconds, according to the company.
The firm employed 220 at the end of 2012, with about half of its staff in Boston.