Apture Inc., a startup that enables publishers to add relevant links to Web pages, announces Tuesday that it has raised a $4.1 million Series A round, led by Clearstone Venture Partners.
We've been following Clearstone closely for awhile now and figured the funding would provide a good opportunity to get an update on the firm and how its investment thesis is evolving in the current economic climate. Clearstone, which operates California offices in Santa Monica and Menlo Park and Mumbai, India, began life in 1997 as Idealab Capital Partners, the venture capital arm of the infamous Idealab Inc. incubator founded by Bill Gross.
Clearstone still specializes in incubating early-stage companies. Partners often work with favorite entrepreneurs to develop ideas into businesses. The firm's exits include Overture Services Inc., which Yahoo! Inc. (NASDAQ:YHOO) bought in 2003 for $1.6 billion, and PayPal Inc., which eBay Inc. (NASDAQ:EBAY) acquired in 2002 for $1.5 billion.
Below you'll find a detailed Q&A with partner David Stern (pictured above), who (along with partner Sumant Mandal) is joining the board of Apture.
But first, a few words about the startup itself. Apture makes it easy for content developers to add links to Wikipedia and other selected sources, including the developer's own content. When a user clicks on a link created by Apture, a small window pops up on the screen with related stories. The reader doesn't leave the original page, enabling the publisher to "keep their relationship with their reader when they're pointing them to rich content," explains Apture CEO and co-founder Tristan Harris (pictured, right).
Apture raised a $500,000 seed round in summer 2007 from individual investors, including VMware Inc. (NYSE:VMW) CEO Paul Maritz, former Boston Globe executive vice president Steve Taylor and former Warburg Pincus managing director Beau Vrolyk. Clearstone partners met Harris and his team through JT Batson, head of business development for the Rubicon Project, a Los Angeles startup in Clearstone's portfolio. For more details on Apture's funding, please see our story in Pipeline (subscription only).
Now for the Q&A with Stern. - Mary Kathleen Flynn
The Deal: How is the economy affecting your investment strategy?
David Stern: These are indeed very interesting times in the venture business. With the economic meltdown, we're presented with a number of enormous challenges that have been well documented, and enormous opportunities too. There is no doubt that new economic realities are presenting many enticing investments opportunities, especially in the later stages of company development. But we believe that we need to be flexible in our investment approach and to invest at any stage and in any structure where we see a highly talented team that is disrupting large markets.
How does Apture fit in with your approach to early-stage companies?
As a firm, when we look at what we've done historically, very well, it has been at the earliest stages of company development -- incubations, seeds, and series As. Overture, Internet Brands, United Online, PayPal, and more recently the Rubicon Project, Nokeena Networks Inc., and one investment/incubation that we'll announce shortly. Apture is in that mold.
More specifically, while many investors turned away from early-stage investing in Q4, we decided that Apture was exactly the kind of unique opportunity that fit with our criteria for early-stage bets. It was horizontal and potentially transformative in nature, it possessed a team that was visionary, driven, and execution focused, and it was potentially highly important to many existing ways of doing business on the Web today, touching core Web processes like content syndication, search, advertising and analytics.
Apture is a continuation of a thesis-driven investment approach. Over the past four years, we've traditionally shunned the Web 2.0 craze, focusing instead on products and services that provide the infrastructure to deliver content or advertising or more efficiency to a very fragmented audience or existing markets. You can see that in our investments in very horizontal companies at the center of very large markets, like Vast.com, or Rubicon Project or Nokeena. Over the past five years, the explosion of data and applications, and the fragmentation of an audience, has created opportunities for companies like Apture to emerge, companies that fundamentally change the way content is produced, consumed, and monetized on the Web.
Why do you think Apture will change the way content is produced?
If you think about the biggest frustration on the Web today from a consumer standpoint, it is that the Web has so much data, so many applications, that it is almost impossible to have Web experiences that are harmonized with the way we like to consume information. In essence, the Web has become not only fragmented in its data, but in its applications. And at the same time, there is no central source for organizing, searching and deploying that data, in places and formats where and when users want it most.
What really struck me as powerful when we first started talking to the Apture team, is that beyond their brilliance and thought leadership of where the Web was heading, they really understood that to create a transformational company, they fundamentally had to rethink how the mass of content and applications should be organized, searched, and delivered in a connected, holistic way, and how to deliver a service that drove a much better user experience on the Web.
We think the Apture team has delivered a service that not only creates a real opportunity for publishers large and small to reclaim their relationships with their audiences and their customers (advertisers), relationships that because of the above, they often find themselves disintermediated from.
If you have the tools to find the very best information, e.g. any specific piece of content from any media type, that you know users want, as you are authoring this article, and inject it into Apture windows that magically bloom in context, you are providing your audience with all the relevant information that they were forced to go find on Google or consume by moving to [other sites] to finish their quest for information. We believe that the Apture service presents an opportunity for publishers to wrap both content and applications, around its users. In essence, to guide them in a customized manner, through to the most relevant information and experiences, in the moment, in a way that provides substantially more engagement than exists today on the Web and keeps people on a publisher's site. The net result is, we think, a better, more engaging user experience for consumers, a better content creation experience for publishers and a better advertising proposition for advertisers.
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