The Allure and Trap of the Early Public Exit
For fast-growing enterprise software startups, reaching profitability and scale usually triggers a predictable conveyor belt of expectations. Investors start whispering about initial public offerings, bankers circle with pitch decks, and the relentless pressure to provide liquidity mounts. Founders often feel pushed to trade their long-term vision and operational independence for short-term market validation.
Yet, rushing into public markets before a company is truly ready can distort priorities, forcing leadership to chase quarterly earnings reports rather than building durable, high-margin products. Smartly.io, a Helsinki-headquartered marketing automation software provider, chose an alternative route that preserved its independence while rewarding the people who built the business from day one.
A $20 Million Secondary Round That Rewards the Team
In September 2017, Smartly.io announced a $20 million secondary funding round led by venture capital firm Highland Europe. Unlike a traditional primary equity financing round where new capital is injected directly into company coffers to fund operations, this transaction involved selling existing stakeholder shares to Highland Europe.
Founded in 2013, Smartly.io had already achieved profitability two years prior to the transaction. Because every single employee at the company held equity shares, the secondary round served as a direct financial reward for the team, alongside early angel investors and the founding team. According to CEO and co-founder Kristo Ovaska, this structure provided meaningful liquidity without forcing the company into a premature IPO or an unwanted trade sale.
By opting for secondary liquidity, Smartly.io sidestepped the risks common among European tech companies that feel compelled to list publicly long before it makes strategic sense for their customer base or product roadmap.
Leveraging Highland Europe for Global Scale and U.S. Growth
While the secondary transaction put cash in the pockets of employees and early backers, partnering with Highland Europe brought far more than financial mechanics. Highland Europe maintains close ties with Highland Capital Partners in the United States, giving European startups a bridge across the Atlantic.
Ovaska noted that the partnership was designed to help Smartly.io construct a seasoned global management team, accelerate hiring, and sharpen customer acquisition strategies. Furthermore, having access to Highland’s institutional network provided financial flexibility for potential strategic acquisitions or aggressive scaling initiatives.
At the time of the funding, Smartly.io had grown to approximately 150 employees. While maintaining an office in Singapore to service the Asia-Pacific region, the company identified the United States as its most crucial growth frontier. Ovaska pointed out that the U.S. advertising market dwarfs all other regions combined and represents the most mature ecosystem for digital marketing automation.
Automating Creative Ad Creation for Social Platforms
Smartly.io carved out its market niche by addressing the operational complexity of managing large-scale ad campaigns on Facebook and Instagram. As an official Facebook Marketing Partner—part of Facebook’s vetted program for trusted marketing technology providers—the platform automated the tedious aspects of social advertising.
The software dynamically generates ads and video creatives directly from product catalog images, eliminating manual design bottlenecks. Beyond creative generation, Smartly.io’s platform automates audience targeting, bidding strategies, and real-time budget allocation, calculating precisely when and where to purchase ad inventory to maximize return on ad spend.
This focus on automation struck a chord with major global brands and agencies. By 2017, Smartly.io had scaled to a $1 billion run rate in ad spending processed through its software. Its roster of over 500 clients included prominent names such as eBay, Zillow, Deliveroo, Lazada, SkyScanner, and JustFab.
Operational Discipline and In-House Support
Scaling an ad tech platform requires constant adaptation. Facebook and Instagram regularly roll out new formats and interface updates, requiring software providers to move rapidly. Smartly.io maintained a cadence of launching new tools and formats for social advertisers every week, while simultaneously keeping an eye on a broader vision: evolving into a truly multi-platform solution spanning Google, Pinterest, and Amazon.
Despite rapid global expansion, the company maintained rigorous operational standards. Uniquely for a software firm of its size, all customer support was kept entirely in-house. Moreover, the majority of Smartly.io’s sales representatives possessed coding experience, allowing them to troubleshoot technical questions directly rather than passing tickets between departments.
Demonstrating hands-on leadership, CEO Kristo Ovaska continued to spend several hours every other week handling customer support queues himself. This uncompromising dedication to customer experience became a core differentiator against competing marketing automation platforms.
Redefining Growth on European Terms
Smartly.io’s 2017 secondary funding transaction stands as a case study in alternative startup financing. By demonstrating that a European software company could achieve sustained profitability, reward its entire workforce through secondary equity sales, and target aggressive U.S. expansion without rushing to Wall Street, Smartly.io proved that founders can write their own rules.
The capital infusion and strategic guidance from Highland Europe empowered the company to scale its management bench and deepen its technological edge, setting the stage for long-term category leadership in automated digital advertising.
