ampler, which matches large packaged-goods firms with consumers seeking samples by mail, has acquired fellow Toronto tech startup AdMass.
AdMass helps brands and their agencies create data-driven, user-generated content (UGC) promotions. Founded in April 2020 by CEO Yuri Kaplan and CTO Daniel Lasek, AdMass’s artificial intelligence (AI)-powered software has served firms like Banana Boat and Sampler—which used it to curate UGC on its direct-to-consumer product sampling platform.
Sampler plans to add AdMass’s AI and UGC capabilities to its offering, and Kaplan and Lasek to its 50-person staff. In an interview with BetaKit, Sampler founder and CEO Marie Chevrier said, “It was definitely a great opportunity to bring both a great product and great talent to the team.”
Chevrier and Kaplan declined to share any of the financial terms of the deal, which closed in late June. It marks Sampler’s second acquisition to date after the startup acquired New York-based beauty industry digital sampling agency Abeo earlier this year from Arcade Beauty, which secured a minority stake in Sampler in the deal.
Both acquisitions represent strategic efforts on the part of Sampler to accelerate its growth. While the Abeo deal helps deepen Sampler’s footprint in the beauty industry and expands its presence in the United States and Europe, the AdMass acquisition enables the startup to expand its product offering.
Founded in 2013, Sampler is known primarily for its work digitizing product sampling. The startup says it has helped over 1,000 brands across 23 countries reach more than 59 million consumers, serving a roster of big-name clients that includes Procter & Gamble, Target, Kroger, L’Oréal, Nestlé, Unilever, Pepsi, and Henkel.
“But what people don’t realize is that we’re also a massive data company,” argued Chevrier, who said Sampler has amassed lots of insight into what types of products consumers care about and how specific consumers react to certain offerings.
“In our next phase of growth, a big focus for the company is how do we start leveraging that data to create really useful products for our brands that are outside of your typical sampling transaction,” said Chevrier.
As Sampler gears up to develop data products and applications, Chevrier said she was looking for a leader to support this work. Enter Kaplan, who is joining Sampler as product manager of data products, alongside Lasek, who is coming on as a back-end developer. The pair will help to integrate some of AdMass’s existing tech and develop new ideas.
“As we worked with Sampler, we realized how much our technologies could complement each others’ data-driven visions,” Kaplan told BetaKit, adding that he expects the deal to amplify the work AdMass has done to date. “AdMass and Sampler feel like a match made in heaven.”
To start, Sampler plans to give its clients the ability to incorporate UGC campaigns into their sampling programs, leveraging AdMass’s tech to streamline the curation of UGC and assess consumers’ influence. As part of its broader AI roadmap, Sampler also intends to explore applying AI to consumers’ social media profiles to identify aspects of their lifestyle based on publicly shared images—a use case the AdMass team had been working on.
According to Chevrier, these moves would give its clients additional data that could help them target a more precise audience and better inform their marketing efforts.
For his part, Lasek told BetaKit that he and Kaplan are “super excited about being able to add AdMass’s AI and data-driven algorithms to Sampler’s incredible growth trajectory.”
To date, Sampler has secured a total of $13 million CAD in venture capital from a list of backers that includes BDC’s Women in Technology Fund, StandUp Ventures, MaRS IAF, and EDC. Sampler’s $4-million financing in 2020 was its last publicized funding round. Chevrier said the startup closed another internal round since then, but declined to disclose the details.
Today, Sampler’s annual revenue exceeds $10 million CAD, and Chevrier said the firm is set to break even in 2023. But the CEO believes the timing is right to invest in growth, pointing to a few market changes that could serve as tailwinds for Sampler.
Chevrier singled out the rising cost of advertising, waning consumer interest in ads and growing privacy concerns, and regulatory and corporate policy changes that have made it more difficult to track consumers.
In this environment, Chevrier argued that marketers must find ways to engage with prospective customers “in a way that’s actually reciprocated,” where consumers are incentivized to interact with brands.
“Incentive-based marketing is really on the rise and [Sampler has] scaled to a really good place to take advantage of this trend,” she said.
“I’m telling the team, this is the time to be bold,” Chevrier said.
While Sampler remains receptive to acquisition-related discussions, Chevrier said no more such deals are “imminent” for the startup at this point.
Chevrier said Sampler is also open to raising more financing in the near future, noting that during the downturn, investor interest in cash-efficient firms has increased.
“We’ve been chatting with a lot of investors that are getting excited about this space,” Chevrier said. “For us, the main thing is finding the right partner, and because we have managed to grow in a very lean way to date, we feel we have optionality.”