RedCircle, the podcast platform for independent creators, has just wrapped its third round of funding since launching three years ago, raising $6 million from investors in the process. RedCircle currently works with more than 5,200 podcasters and with the new wherewithal, the company plans to expand its team.
The Series A round was co-led by EPIC Ventures and Refinery Ventures, with participation from SignalFire, Bloomberg Beta, MathCapital and several angel investors including Wonder founder Justin Wohlstadter, Fullscreen founder George Strampolos, and Eckart Walther – who was a contributor to the original RSS specification.
Podcast News Daily caught up with RedCircle co-founder and CEO Mike Kadin to talk about how the market is for podcasters looking to raise money, how he plans to spend what they’ve pocketed, and the changing market for podcast advertising.
PND: There have been fewer announcements this year from podcasters about raising money. How is the market?
Mike Kadin: The market for venture capital overall in the tech industry right now is insane. There’s a lot of money moving through VCs. Podcasting is really only starting to get to a size where it makes sense for venture capitalists to invest. I think more investors are seeing the opportunity. Usually a billion dollar market is small potatoes for them. But I think technologies like Clubhouse have also given some investors some pause to think about what’s the future of audio look like.
PND: What will RedCircle do with the money?
Mike Kadin: Our business has been around for three years and for the most part it functions like a marketplace. We have podcasters and advertisers, and so historically those kind of businesses are hard to spin up because you can’t sell advertising unless you have a bunch of podcasts and you can’t attract podcasters unless you have advertisers. It’s like a chicken and egg thing. The way we conquered that is we didn’t pay attention making money for ourselves or our podcasters for the first year of the business. We focused on podcast technology and getting the business started and building tools for podcasters and giving those away for free. Then, we focused on the advertiser side of the business. Now we have a product that both parties are using and there’s market demand and as a result there are significant dollars moving through our business. The money is no longer about can we build something that we think can be a viable business. We have a viable business and a product that works and a product that is putting dollars into podcasters hands. Now we have to see if we can scale it.
PND: How much ad money will move through your system this year?
Mike Kadin: We’ve taken our revenue and grown it more than ten-times in the last year and we’re on a pace to putting millions of dollars in podcasters’ pockets based on the last couple of months. We take a 30% cut of host-read ads and a 50% cut of the programmatic ads. Most of the dollars that move through our business ends up in podcasters’ hands.
PND: How does your podcast hosting business fit in?
Mike Kadin: We’re like a large podcast network that is powered by technology instead of an army of people with spreadsheets. We provide hosting technology, but we’re not that interested in hosting. That’s more a consequence that we want to do the automation of the ad deal end-to-end and that requires us to be able to stitch the audio into the podcast content which means we have to be a host. What we are really trying to do is create a streamline process that is for podcast media buying. We don’t want to build a directory of podcasts that are for sale. We want to make a point-and-click system where an advertiser can put $50,000 onto a hundred different podcasts in just ten minutes of clicking.
PND: Are ad buyers thinking about aggregating smaller, indie shows any differently in 2021?
Mike Kadin: Some of the tools that we have built have helped them start to become comfortable. One objection to doing this is that it is operationally intensive if you don’t have software like ours. Emailing a hundred different podcasters is hard. The second is brand safety and we provide tools for that. The advertiser can see what the other advertisers are on a show, look at the social media presence and pre-screen the ad read before it goes live. That helps them feel more comfortable with buying on some smaller, less-known shows. The third objection technology can’t solve. Media buyers have to go to their boss and say they got them on Michelle Obama’s podcast – and what we can give them instead is the metrics. Businesses like Chartable and Podsights are providing dashboards that instead of showing Michelle Obama to your boss you can show ROI that speaks louder than that.
PND: Does that work?
Mike Kadin: It’s our belief that as it becomes more common to buy middle market podcasts like we sell, you are going to get better performance from these shows. They are not loaded up with a million ads. It’s still a host-read rather than a producer-read, which is getting more common in the top podcasts, and the relationships between the host and audience on a 10,000 listener show about gardening is very intimate.
PND: How does the ad business look for the fourth quarter?
Mike Kadin: The last couple of months have been extremely hot in terms of demand, and our revenue reflects that. So I anticipate it’s going to be a pretty wild Q4, but we’ll see.
PND: There’s been a lot of consolidation in the business. Is RedCircle more of a buyer or seller?
Mike Kadin: Our business is growing really nicely in an industry that is growing really nicely and so we’re in a position where we feel unbounded in our ability to grow and deliver on our mission of getting podcasters paid. For now, I don’t see any reason why we would try to roll the business up. Things are going great and things are growing. Our solution works somewhat differently than others in that it helps podcasters monetize in every platform where their content is available. And so as the market consolidates in terms of listening platforms, our business model stands up great and we’re going to be able to continue to help podcasters monetize regardless of where the listening happens.