Marketing firm Red Ventures comes out of nowhere and scores $250M

An obscure marketing firm out of North Carolina just landed $250 million in funding from Silver Lake Partners — a firm known for investing in tech companies like Dell and Alibaba Group.

What sets Red Ventures apart from other marketing firms, and the reason Silver Lake is attracted to the company, is its ability to prove its success at procuring customer acquisitions for its “partners,” which is how the company refers to its clients.

“We are maniacal about data. Our ultimate goal is closing the loop between offline data and online data,” Maghan Cook, Red Ventures director of communications, told VentureBeat.

Here’s a glimpse of how Red Ventures does marketing differently: An East Coast Internet provider wants to do a paid search campaign on Google to bring in new customers. Red Ventures will build its own website for that search campaign, which will appear very high in Google’s search results. It will be designed by Red Ventures developers and run by its sales team. All the links and phone numbers on this website all lead back to Red Ventures. So, the brand itself doesn’t interact with potential customers. Of course, Red Ventures’ website is built to the brand’s specifications, but the customer acquisition responsibility is placed entirely in Red Ventures hands.

“We’ll API into our partners’ systems and then at the end of the day we’ll be handing over a paying customer,” said Cook.

Brands don’t easily hand over this process, but Red Ventures already works with some heavyweight service providers and insurance companies like DirectTV, Verizon, and MetLife. Part of the reason companies are willing to give Red Ventures control is because of its business model. The marketing firm doesn’t get paid until it delivers a paying customer, which means it’s covering the upfront cost of the campaign.

The other reason companies are willing to relinquish control to Red Ventures is data. Cook said that even if a company is wary at the start and only gives Red Ventures 10 percent of its traffic, her firm will gain the company’s trust over time based on its performance metrics and customer acquisition numbers.

You’ll be surprised to know that Red Ventures has been around since 2000. It was founded as a fairly traditional marketing firm. With the crumbling of the dot-com era, founders Dan Feldstein and Ric Elias decided the company needed to pivot in order to survive. In 2005 the firm started taking a more data driven approach. That means the company has been collecting data on customer behavior for 10 years, likely making its acquisition process that much more precise.

Right now, Red Ventures focuses on working with Internet and telecommunication providers and a few financial services. But with this new round of funding, the company is looking to tackle the energy sector. Cook said she thinks consumers are looking for a better way to shop for energy services, rather than just relying on what their neighbor has. Whether that tool will emerge as a price comparison marketplace or something else, is yet to be seen.

The company is also looking at international expansion, which is one of the reasons it chose Silver Lake as an investor. Prior to the Silver Lake investment, Red Ventures took an investment from General Atlantic for an undisclosed amount in 2010.