Far from the usual European tech hubs lies Codewise—
Europe’s fastest-growing adtech startup
Revenue growth north of 13,000 percent (no, that’s not a typo) from 2011 to 2015 and a purported “annual run rate” of USD 50 million: figures that would impress no matter the market—but even more so when you find out that online startup Codewise isn’t based in Silicon Valley, but Krakow, Poland. Is there a hidden champion in central Europe poised to explode? We took a look to find out if the hype is real or just a bunch of smoke.
Codewise has two products on the market. Their first market offering was, and still is, Zeropark, a platform that purchases and distributes traffic from parked domains (domains acquired, but currently not in use). Oftentimes, these deal with “typos” of domains of larger web services, the practice of acquiring these domains, called “typosquatting,” has gained footing as an industry niche. A owner of a domain like “youtibe.com” can redirect users who accidentally end up on the site to traffic purchasers and thus generate revenue. Traffic purchasers can then redirect such users to a landing page in a YouTube look. Here the site operator can generate any number of leads, like collecting email addresses through a raffle, as the following video illustrates (0:57).
449 Billion Redirects pro Monat
The name of the product comes from “parked domains” and redirecting users without an additional click, so-called zero clicks—high-quality traffic it is not. That just makes it even more astounding what Zeropark promises its publishing partners: CPMs (cost per thousand impressions) ranging from 3 dollars to $4.12 for Germany and the USA respectively. Just as impressive is the sheer volume of traffic that Zeropark brokers: 449 billion monthly redirects according to company figures.
Generally speaking, their traffic is purchased from affiliate marketers—the target group for Codewise’s second product: Voluum. The product is a tracking solution designed to deliver metrics to affiliate marketers regardless of the network. With Voluum, marketers can monitor their campaigns to see what’s performing well and amongst which users, so that they can further optimize.
A premium freemium
According to off-the-record reports, the software is very popular among affiliates with strong revenues for a couple of reasons. First off, Voluum is not a self-hosting solution like other tracking products that clients can only use on their own servers, as Codewise is operated on Amazon servers. This provides added convenience and, more importantly, presumably enables Voluum to process higher amounts of data.
The second factor contributing to the software’s success is the manner in which Codewise penetrated the market. Namely with a free test phase where users could try out the software’s full functionality completely for free. Codewise then scaled back the practice, offering it as freeware until a certain tracking volume had been reached, before charging for it. After thus establishing a market foothold, they phased out the freeware and now charge $99 a month for the introductory package. Despite being a completely pay service now, the freemium model figures to have been the catalyst to off-the-charts client acquisition. In an interview back in November 2014, Codewise CEO Robert Gryn said that word of mouth alone netted them 3000 users.
Mega growth garners international attention
According to a ranking released by Deloitte, these two products helped Codewise generate an unfathomable 4555% growth since its founding 5 years ago. The auditing and consulting firm not only hailed the startup as one of its “Rising Stars 2015” in Central Europe, but handed it the top spot. No surprise there as from 2012-2015 Codewise increased profit to nearly USD 30 million and saw revenue soar by 13,000 percent, good enough for second place among all European companies according to the Financial Times 1000. In a post on the company Facebook page from April of that year, CEO Gryn stated that the company’s current annual run rate was USD 50 million, while the full-time workforce was around 90 strong. Apparently, there are no external investors at present and the company says it is self-financed.
Gryn seems to be planning to expand Voluum into a marketing tech platform. Most recently, the company launched a proprietary demand side platform (DSP) to purchase traffic, invested in talent in the personage of three experienced online marketing managers: Gavin Stirrat, Stephen Jenkins and Will King (previously with Millennial Media and AOL) and moved company HQ, which can now house 200 employees. The bold moves would seem to be in line with the company morale and confidence, the poster boy for which CEO Gryn underscores with a Facebook profile full of pics from the island of Mauritius and in front of his Mercedes AMG. And who can blame him for basking in the moment? The digital scene is cutthroat and dog eat dog—even for a “Polish Unicorn.”