Insense

Insense

Growth Stage

Redesigning social ads with data-driven creativity

Redesigning social ads with data-driven creativity

Overview

Raised this Round: Raised: $140,967

Total Commitments ($USD)

Platform

Republic

Start Date

05/17/2020

Close Date

11/01/2020

Min. Goal
$25,000
Max. Goal
$1,070,000
Min. Investment

$100

Security Type

SAFE

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Valuation Cap

$10,000,000

Discount

20%

Year Founded

2016

Industry

Marketing & Advertising

Tech Sector

MarketplaceTech

Distribution Model

B2B

Margin

Low

Capital Intensity

Low

Location

New York, New York

Business Type

High Growth

Insense, with a $10 million valuation cap, is raising crowdfunding on Republic. The company is redesigning digital advertisements with a data-driven approach. The platform connects marketers with influential content creators, and its machine learning capability analyzes performance data to find correlations. Marketers can, thus, save a lot of money by running ads only with high potential creatives. Insense was founded by Danil Saliukov, Anton Saliukov, and Alex Fedorenko in August 2016 and has raised over $1.5 since its founding. The funds from the current round of crowdfunding, with a minimum goal of $25,000 and a maximum goal of $1,070,000, will be used for customer acquisition and expansion of sales and marketing teams. Insense demonstrated a 2x year-over-year growth in 2019, resulting in gross sales of $1.5 million. The company is currently working with top clients like Nestle, P&G, and L’Oreal.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$1,100,504

$554,006

COGS

$737,531

$512,121

Tax

$0

$0

 

 

Net Income

$-176,820

$-387,259

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$180,347

$57,773

Accounts Receivable

$135,823

$25,191

Total Assets

$794,812

$470,589

Short-Term Debt

$114,512

$23,469

Long-Term Debt

$1,520,700

$1,110,700

Total Liabilities

$1,635,212

$1,134,169

Financials as of: 05/17/2020
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Summary

The Insense team has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

Next Section: Problem

Problem

It’s very difficult to advertise effectively on Facebook and Instagram. In fact, 62% of small business owners say that Facebook ads simply don’t work for them. This difficulty is likely because they lack the time and expertise to use the platforms to their advantage. 

 

Due to this lack of knowledge, many small businesses outsource social media management to experts. Even enterprise brands often work with production agencies to create content for social media. These social media marketing services cost anywhere from $1,000 to $20,000 per month, with large brands likely spending even more for major ad campaigns. 

 

Unfortunately, much of this expensive content is ineffective. A Nielsen study found that almost half of paid advertisements in Europe don’t reach the right target audience. AdParlor found that American companies in its sample wasted 20-50% of their social media spend. One reason why many paid ads fail is ineffective creative (graphics and videos in the advertisement). A common form of this is creative that has gone stale from being reused for too long

 

Despite the flood of blog posts, software tools, online courses, and other resources to help brand managers advertise more effectively on social media, they still lack an industry-defining tool to fix the many issues that plague paid ads. Could a new method of content production tied to performance be the solution?

Next Section: Solution

Solution

Insense is a video production marketplace connecting content creators with brands seeking fresh, high-performing video content for social media. Insense’s machine learning technology allows brands to select content that is optimized according to performance data, connecting creative content production with quantitative insights. 

 

Advertisers who subscribe to the Insense platform fill out a creative brief with specifications on the type of video content that they need for upcoming ads. Creators in the Insense marketplace can bid to create the content. Advertisers select a creator and receive video content from that freelancer. The Insense machine learning platform recommends which pieces of content are best suited for the advertisers’ target audience based on past content performance. Advertisers select the recommended content, can trim videos and add logos or graphics, and send the content to be posted by influencers and/or as paid advertisements on their own social accounts. 

 

Insense clients source content, work with creators, post ads, track performance, and monitor engagement all through the Insense platform, making it a one-stop shop for effective content production. Insense replaces expensive and complex relationships with video production agencies and the process of transferring content from agencies onto social media, greatly streamlining the advertising process. 

 

Insense generates revenue from transactions between advertisers and content creators, capturing 20-30% of each fee. Clients pay an activation fee of $149 to launch a campaign (request for content) on the marketplace, or pay a monthly subscription fee ranging between $299 and $549 per month to access premium features and pay no activation fees for multiple campaigns. 

 

Insense has built a network of over 35,000 content creators worldwide and has produced content for 65+ brands, including P&G, Nestlé, and L’Oreal. Insense reports that video assets are created four times faster and 10 times cheaper than content sourced from traditional production studios. They also state that Insense content produces twice the return on investment compared to non-Insense paid ad content. 

 

Insense was founded in 2016 and has raised over $1.5 million in funding from angels and venture capital firms including Starta Accelerator and Empire Angels. The company generated $1.1 million in revenue last year, a 100% increase from $550,000 in revenue in 2018.

Next Section: Other

The Team

Insense was co-founded by three Russian immigrants with experience in B2B sales, marketing technology, and entrepreneurship. Danil Saliukov, Insense’s CEO, has 10 years of experience managing relationships in the marketing technology and payments industries, working with both startup companies and corporate enterprises. COO Anton Saliukov, presumably Danil’s brother, is a serial entrepreneur with three prior exits in e-commerce. He previously founded a marketing agency. Alex Fedorenko is a former ad agency creative director and Insense’s Chief Product Officer and Creative Director. 

Next Section: Other

Growth Plan

Insense projects $3.84 million in revenue for 2020 and plans to hit profitability by late this year. The company hopes to achieve $14 million in net revenue by 2023. 

 

Insense will use the capital from this fundraise to drive customer acquisition through the expansion of its sales and marketing teams. The company also plans to invest further in its machine learning algorithms, analyzing previous content performance data to deliver better predictions of future content performance. Insense’s ultimate vision is to build a marketing technology platform powered by artificial intelligence that automatically optimizes creative briefs, selects content creators, and recommends video clips based entirely on past data points.

Next Section: Why We Like it

Why We Like it

  • Traction in revenue and product performance: Insense reports that its innovative approach to paid advertisement content creation is four times faster and 10 times cheaper than content produced by traditional creative agencies. These figures are compelling to advertisers looking to save money on the costly paid advertisement cycle. Insense’s revenue proves just how compelling it is: the company generated over $1 million last year and plans to hit almost $4 million this year. This traction demonstrates fit between Insense’s product and advertisers’ needs, which is a strong signal of the company’s future success.

  • Product meets the needs of frustrated advertisers: Today’s leading brands spend millions each year on Facebook and Instagram advertisements and are continually frustrated by the return on investment yielded by that spend. Consistent fresh ad creative is a key way to improve ad performance, but companies are exhausted at the thought of working with costly, time-consuming traditional production agencies for more and more frequent video content. Insense is providing a simpler and cheaper way to source new video content, with a focus on data and influencer exposure that freelance sites like Fiverr can’t match.

Next Section: Rating

Rating

Insense is a video advertisement production platform combining many of the latest marketing buzzwords (short-form video, influencers, data) into one efficient tool for advertisers. Through a simple workflow augmented by machine learning, brands can consistently deploy fresh video content to draw customers onto their sites with high click-through-rates and low cost-per-click.

 

While Insense does have an innovative marketing technology concept, the market is fairly saturated with companies offering similar software solutions for content production and monitored ad performance. Vidsy and Vidmob both compete with Insense to connect creative content creation with data performance. Other companies offer other stages of the Insense process (Fiverr for freelance content production, Upfluence for influencer distribution, etc.). It’s possible that there is enough market for creative content plus data insights and influencer relationships to power several similar companies in the space, but unlikely that all of these companies can grow to large-scale success with so much competition. Insense’s existing traction seems to demonstrate product-market fit. However, any competitor could suddenly overtake Insense and steal market share with new feature releases or improved customer acquisition funnels.   

 

If Insense can outlast the pack of similar marketing technology competitors, it would be well-positioned for exit. Marketing and advertising technology has been a lucrative space for investors in recent years, with many examples of top-dollar acquisitions by companies like Google, Facebook, and Verizon. Insense’s CEO has indicated in the dialogue on the company’s Republic raise page that his goal is to build a billion-dollar company, presumably to go public via an IPO. This route is less common for marketing technology companies, though Sprout Social IPO’d in December 2019 and has performed well despite the market’s coronavirus downturn. 

 

Marketing technology is a crowded space, and the digital advertising landscape changes rapidly. It is difficult to predict whether Insense can outlast competitors and continue to adapt to advertisers’ evolving needs for content creation. However, the company’s traction is a positive sign that its software is valuable to brand managers. With proven revenue driven by a strong product and good exit potential, Insense is a Deal to Watch.

Founder Profile

Insense Founder Danil Saliukov Talks Digital Advertising

Digital advertising is expensive and time-consuming. And worse, much of it is ineffective. AdParlor found that American companies in its sample wasted 20-50% of their social media spend. One reason why many paid ads fail is ineffective creative (graphics and videos in the advertisement). A common form of this is creative that has gone stale from being reused for too long.

Insense wants to fix the problem of stale ads through its marketplace. This Deal to Watch startup is connecting mid-sized businesses with content creators as well as providing data-driven insights on how effective an advertisement is. We sat down with founder Danil Saliukov to learn how Insense was started and what investors should know about the company.

Read Founder Interview

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Insense on Republic
Platform: Republic
Security Type: SAFE
Valuation: $10,000,000

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