LUMA Capital Partners Announces Investment in HookLogic
The web and mobile are fundamentally changing the way we buy goods as consumers. They are also radically changing the infrastructure of global commerce and the power dynamics of retailers and brands. According to Forrester Research, over the next five years e-commerce sales in the U.S. will grow more than 50%, equating to $523 billion in annual e-commerce sales by 2020.
At LUMA Capital Partners, we are excited to invest in companies powering this transition. One such company is HookLogic, who has become a clear leader in helping grow the e-commerce pie for both retailers and marketers, and is one of our first investments at LUMA Capital Partners.
What excites us so much about HookLogic? The company is leading the industry in three market trends that we are watching closely: e-commerce properties transitioning to media companies, results-driven advertising versus proxies, and mobile growth. In today’s overcrowded e-commerce market, the largest e-commerce retailers in the world, like Amazon and Alibaba, are generating billions of dollars in revenue outside of retail sales, namely advertising. With first-party shopping data and site traffic with high purchase intent, retailers are effectively media companies that possess very valuable assets. HookLogic provides retailers with a platform to monetize these assets with e-commerce advertising, adding new revenue streams outside their core business.
Capturing the attention of consumers who have almost limitless product selection online is a significant challenge for marketers. HookLogic’s advertising exchange enables marketers to promote their products at the point of purchase and drive incremental sales. The company’s broad access to SKU-level transactional data enables closed loop measurement and proof of impact. In other words, their platform provides marketers with ROI-based marketing driven by real business results, not proxies or guesses. When marketers can tie ad spend and revenue together with true performance marketing, marketing spend becomes “always on” as it moves from a discretionary expense to a cost of goods sold.
With the rise of mobile, native advertising has emerged as the most effective form of advertising for the device. As e-commerce shifts to mobile, retailers and marketers both need native advertising to enhance the shopper experience, rather than interrupt it. HookLogic’s in-feed ads give its customers an edge over many retailers and brands that struggle to effectively monetize on mobile because they are unable to deliver enriching mobile experiences to consumers.
We love marketplace businesses — and HookLogic is one of the few companies powering a true marketplace at scale outside the walled garden platforms of Google, Facebook and Amazon. We believe that to succeed in the fragmented world of digital marketing, a company needs to “own” the market and build significant moats through a dominant market position. These characteristics are rare and when we see them, the power of the company and their platform becomes clear. HookLogic has built this dominant position by partnering with the majority of the largest retailers in the world and that partnership has led to adoption by the most important brands in the world.
We also believe strongly that this is a winner-take-all market and is larger than just retail. HookLogic’s technology is prime for any market with significant e-commerce activity and countless consumer options, such as travel.
HookLogic is well positioned to win with its incredible team. The company was founded 12 years ago and is operated by a group of digital marketing veterans from aQuantive, Beyond Interactive and Marchex. We continue to be amazed by the team’s vision and execution and are very excited to be an investor in the company!