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Manchester adtech firm Lunio’s ‘unicorn’ ambitions as it moves to new HQ

Lunio (Left to Right: Segev Hochberg, Alex Winston, Neil Andrew).

Pointless clicks from bots, fake users and malicious fraudsters are blighting the global ad industry, with losses amounting to a staggering $120bn a year.

But Manchester-based Lunio wants to change this. Through its performance marketing efficiency platform, the company is helping marketers get the most out of their ad spend by catching those unwanted clicks.

“It’s a significant problem that’s growing. It’s not just the waste of actual ad spend, it is the impact of that ad spend being spent on bots rather than real people,” Neil Andrew, co-founder of Lunio, tells Prolific North.

“If you spend over £100,000 over a year on bots and that £100,000 would have generated £500,000 in revenue for the business, it’s not a £100,000 loss, it’s a £500,000 loss. It has a significant impact.”

Lunio works with more than 1,000 businesses including McDonald’s, eBay and Metro Bank through its SaaS platform.

Co-founded by Andrew, Alex Winston and Segev Hochberg in 2018, the platform was bootstrapped until 2020 when the trio first raised funding. “That’s when it really took off,” he says. Although unable to reveal existing revenues, he says revenue has grown seven-fold since 2020.

Last year, Lunio closed a $15m Series A funding round led by Smedvig Capital and an angel fund of senior leaders from Google and Warner. 

As the platform continues to scale rapidly, there are some “really exciting developments” to expand Lunio’s product offering with plans to open an office in the US – potentially in Boston or New York.

“About a third of our revenue comes from the US at the moment and we don’t have any boots on the ground,” he says. “It’s unusual for a UK business to be doing a third of their revenue at our scale and selling from the UK so we’re looking at opening a US office either later this year or early next year.”

“You don’t need to be in the capital to build a tech unicorn”

It’s not just plans for the US – Lunio has just officially opened the doors to its new headquarters in Manchester too. It marks a big growth milestone for the company, moving from a six-person office three years ago to a city centre office with space for more than 100 staff. It’s needed now more than ever as the company has been on a hiring spree, boosting the team from 69 to 85 in just a few months.

“Every week, there have been multiple new people joining,” he explains. “The new office is a real selling point for the business. It helps us attract the best staff right and ultimately, that’s what we want. You want to pay well, provide good benefits and a good place to work. Hopefully we tick off all three.”

Rapidly scaling in just a few years, he believes Lunio could potentially become Manchester’s next tech ‘unicorn’. Unlike other scaling companies or unicorns, he wants to make sure Lunio’s headquarters remain in the North.

Manchester is where the founders’ roots are, where the business was founded and has “all the talent we need”, he explains. “All roots point back to Manchester, it has a great tech scene and is a hell of a lot cheaper than London! We have this belief that you don’t need to be in the capital to build a tech unicorn.

“The UK tech scene, in terms of creating unicorns, is woeful in comparison to the US and the VC industry is awful in the UK as well. There are a lot of things going against it but I do believe that Manchester is a great place to build and I think we’re well positioned to do it.”

Story behind Lunio

The Lunio solution was originally the “secret sauce” behind Andrew’s former digital marketing agency PPC Protect, which he ran alongside fellow co-founder Alex Winston. 

Neil Andrew
Neil Andrew

“We were doing well but we weren’t setting the world on fire,” he says. In the process of redoing the company’s website, his partner at the agency spotted copy that said ‘we’re not like other agencies’. He pasted it into Google and around 13 million results came back. “Somehow,” he says, “I think that we might be just like other agencies!”

But one thing was different – the SaaS platform the agency offered to advertisers. 

It led to the duo meeting their third co-founder Segev Hochberg – who became a top client of the agency – on Reddit after he was experiencing issues with his marketing budget, plagued with wasted clicks from bots and fake users.

Droves of people were reaching out asking to use the Lunio solution and it sparked a conversation about its potential to scale. Running both in parallel for a while, the team realised “hang on, we’re onto something here”.

The trio joined forces in 2018, moving away from the agency to focus on scaling and developing Lunio.

How Lunio works and the future

The SaaS product is sold to marketers, advertisers and through agencies. After a company signs up and connects any accounts it might be advertising on, whether that’s through Google, TikTok or LinkedIn, the platform pulls through data about those clicks on that campaign. 

It analyses the people interacting with ads, whether they are real people interested in the products being promoted or if they’re bots or real people with zero conversion intent. 

“If someone clicks an ad on Google for example, and they’re not engaged or they’re a bot, we can proactively stop them ever seeing it on Bing, LinkedIn, Twitter or anywhere else even if they’ve never interacted through that channel.

“It leads to higher return on ad spend for our users, they’re having more of their budget reach legitimate people get more conversions as a result.”

During the pandemic when ad spend boomed, one of Lunio’s clients had been running a display campaign that worked out between $3m and £4m. Lunio found an “extreme” case where 99.5% of that traffic was found to be “non-human” – millions of bots were the ones viewing the ads.

The client had only been looking at impressions and “eyeballs on ads” rather than conversions. 

Although awareness of the issue is “getting better”, some advertisers “don’t want to believe that there’s a problem” and uncover that they’ve been “totally wasting hundreds of thousands or millions of managed ad spend”.

“It’s up to us to show them otherwise,” he says. “No marketer wants to go to their CFO or their CMO and say: ‘I wasted £55,000 of ad spend in the last month’ even if the campaign performed well. It’s helping people to understand you’re not doing anything wrong – you just weren’t aware of the issue and now you are.

“Display is where most marketers are aware of it anyway. It’s when we then say this is the same issue on search and on paid social and so on that’s when they’re not necessarily aware that the problem exists.” 

As for the future, the next stage for Lunio will be looking at a Series B raise but Andrew is reluctant to end up on a “treadmill” of raising, unless it’s for the right reasons.

“Personally, I really despise this infinite growth, infinite capital model. We’re seeing now, especially the past six months or so, that it just doesn’t work anymore. We’ve always worked on a model of we raise money, we get to a point where our destiny is in our own hands. So do we need to raise again?

“We don’t want to be on this treadmill of ‘we have to raise series B, series C, series D’ – I don’t think it’s the right way to do business.”

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