Firefly Nets $21.5 Million Seed Round To Boost Ride-Hail Driver Revenues With On-Car Ads

A car is just a packet carrying a payload through a network so plopping an ad unit atop it as it caroms from node to node is kinda gross but is probably a viable business.

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Today, San Francisco-based Firefly announces it is officially launching its car-based outdoor advertising platform out of beta. The company also announced that it’s raised a whopping $21.5 million seed round co-led by NFX, Pelion Venture Partners, Decent Capital (which is backed by the founders of Tencent), and Jeffrey Housenbold of the SoftBank Vision Fund, among others.1 According to the company, Housenbold invested in an individual capacity, separate and apart from his role at the Vision Fund.

It is the first round of outside funding the company has raised. “We’d been bootstrapped” until this round, said Firefly’s CEO Kaan Gunay in a phone interview. Although the company didn’t disclose its financial performance or valuation, Gunay said investors were “very pleased with the progress we’ve made to date.”

Over the last year, the company said it has executed over 50 advertising campaigns and racked up more than 110,000 hours of drive time in Los Angeles and San Francisco.

Connecting Businesses In The Smart City

Picture a taxicab. It might be yellow and have a black-and-white checker motif to some of the exterior trim. And, chances are, it also has a small billboard on top that’s probably advertising a direct-to-consumer mattress brand on one side and a seedy joint on the outskirts of town on the other.

A new iteration on that on-car billboard, Firefly replaces backlit printed placards with screens connected to sensors and a location-aware computer that pipes in locally-sourced ads to display for all to see. In turn, the company car-mounted screen modules will come with a set of sensors that ingest information about the outside world. The company brokers access to both.

It’s the same sorts of ads you see on cabs today, but now they can be deployed when they’re most likely to make an impression, rather than melting into the background noise of city life.

This creates a two-sided business amongst at least four sets of stakeholders.

Here’s the business:

  • On one side, there’s the ad business. It’s easy to understand the appeal of geo-targeting for advertisers, especially for businesses with physical retail locations.
  • Although the company says it has no intent to monetize this quite yet, it will also generate a massive amount of ambient, geo-tagged data from the sensor arrays on its vehicles. For now, Firefly is giving this data away for free to cities and civic organizations it partners with.

And here are the different parties involved:

  • The company itself.
  • Drivers for ride-hailing services, who will keep the company’s ad screens on their cars. Firefly says the average driver in its ad network can generate an extra $300 in monthly free cash flow. This is during a time when drivers are making less money working for transportation networks like Uber and Lyft, the latter of which just filed to go public.
  • Advertisers, which are always looking to improve their return on investment by increasing the rate at which their ads convert people into customers.
  • Cities, which the company wants to partner with on the advertising and data side.

Firefly says it has set aside ten percent of its ad inventory for local nonprofits, public sector PSAs, and related noncommercial messaging. The company also allocates ten percent of its screen time to non-chain small businesses.

Beyond these gestures on the ad side, the company also wants to open up some of its data to municipalities and local organizations. The company is also working to integrate accelerometers and a temperature sensor into the hardware platform. Firefly says the accelerometer can be used to detect and share the location of potholes. Its devices already measure air quality.

But these sensors could also be relevant to the ad side too. Did the air get suddenly cooler and wetter? Time to break out the rain-themed ads. Is the accelerometer indicating a lot of stop-and-go traffic? Show content that appeals to escapist fantasies, like discounted airline tickets to a tropical island or images of a cold adult beverage being poured into a frosty glass.2 We’ll stop before giving anyone any ideas.

While this (possibly dystopian) science fiction future is all the more inevitable now that Firefly and companies like it gain traction, its founder is adamant about its community mission.

Apart from the GPS sensor, the company already includes an air quality sensor, measuring particulate density and other factors, onboard. Gunay said that during the worst of the California wildfires a couple of weeks ago, Firefly was able to share street-by-street, minute-to-minute air quality data with the Coalition for Clean Air, which was monitoring the situation.

“Unlike many other startups, we started Firefly with a community-first mentality—we sought to have community baked into our product, ingrained in the DNA of our company, rather than tacked on as an afterthought,” said Gunay in a statement.

Illustration: Li-Anne Dias

  1. Other participating institutional investors include Stanford’s StartX Fund, Industry Ventures, Muse Capital, and Chesterfield Investments. Patrick Schwarzenegger (son of former California governor Arnold Schwarzenegger) and Lime founders Toby Sun and Brad Bao participated as individual investors.

  2. For its part, though, the company claims to “self-regulate” ads on the platform. For example, it doesn’t show ads for alcohol in school zones, and it has bowed out of the cannabis ad market.

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