Extreme Reach, Profitable and Growing Fast, Looks to Go Big with New Financing

9/6/11Follow @gthuang

Extreme Reach is going through some extreme growth—and it’s about to get very interesting, very fast. The Needham, MA-based video-ad distribution startup is rumored to be raising a large investment round, one that could fuel its rise to become one of the Boston area’s top software startups.

OK, advertising tech companies can be deadly boring to write about, but Extreme Reach isn’t one of those. For starters, its chief executive envisions a future in which you will walk down the street and see JumboTrons playing all sorts of video ads, “Blade Runner”-style. Naturally, he wants Extreme Reach to provide the technology to deliver those ads to every screen. And it’s not just JumboTrons—it’s also TVs, laptops, mobile devices, and whatever they invent next to distract us from real life.

“We really want to lead the market in fusing online advertising and TV,” says co-founder and CEO John Roland.

Xconomy first profiled Extreme Reach back in 2009, when the firm was just getting off the ground with its product. Roland and the founding team came from FastChannel Networks, an ad-tech company acquired by DG Systems in 2006. Extreme Reach is essentially using cloud-based technologies to go after a “superset of the same business” as FastChannel, which is now called DG FastChannel (and is a competitor to Extreme Reach, particularly in TV ad distribution).

But the recent performance of Extreme Reach warrants a major update here. The company has been “very profitable for the past 18 months,” Roland says. And check out this growth curve: $2 million in revenue in 2009, $7 million in 2010, and on target for $20 million in 2011, he says. The startup has gone from 17 employees to about 90 in the past two years, spread roughly evenly across Boston, New York, Chicago, Los Angeles, and Seattle. And it’s looking to hire about 20 more staff, and to open offices in new cities over the next couple of months, Roland says.

This trajectory has “big expansion venture round” written all over it. Extreme Reach previously raised a total of $12 million from Greycroft Partners, Village Ventures, and Long River Ventures. But the company has only used about $5 million of that, Roland says. He acknowledges that the team is “considering” raising a $30-50 million round, but he declined to give any more details about prospective investors and so forth.

It sounds like the company is preparing to go big—and it could have a huge impact on the advertising and video tech cluster, especially around Boston, which is home to many complementary companies such as DataXu (ad analytics and optimization), Brightcove (video hosting), Nexage (mobile ads and publishing), Celtra (mobile ads and analytics), and Nanigans (social ad optimization), to name just a few.

Extreme Reach’s competitive advantages include its relationships with ad industries and its “domain expertise around video,” says Roland. Technologically, the company uses cloud-based Amazon Web Services and Nirvanix to store and serve video ads.

Roland calls the ad distribution sector “a very big space with a lot of room for different players.” But he acknowledges that he would like to see Extreme Reach “be the one place to go—the central clearinghouse” for video ads to be distributed. We’ll be watching to see if the company’s imminent expansion is successful in that regard.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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