GraphEffect Secures $2 Million in Funding to Expand Its Facebook Ads API Services

GraphEffect, a Facebook tab application developer and marketing platform with Ads API access, announced $2 million in new funding today. Secured from Matt Coffin formerly of Experian Interactive, audience targeting service provider x+1′s president Stephano Kim, and several VC firms, the money will be used to expand the company’s service offering and make hires for its technology and sales wings.

The funding indicates growing investor interest in the Facebook Ads API as a crucial part of any online marketing strategy.

GraphEffect, formerly Focused Labs, previously developed custom tab applications for brands such as Microsoft, but has recently been running Facebook marketing campaigns aimed at driving Likes and increase downstream conversions. Its Ads API service uses algorithmic optimization to maximize return on spend.

Founded last year by Clark Landry and James Borow, GraphEffect soon reached profitability. Its clients include LiveNation, Sears, Kleenex, and Bacardi. Ad spend from these major brands can be up to hundreds of thousands of dollars a month, of which Ads API service providers can take between 2% and 20% depending on advertiser commitment.

Investors, including Thrive Capital, CrossCut Ventures, Rincon Venture Partners, Founder Collective, Lerer Ventures and Baroda Ventures that joined the round, are likely betting that more brands will be shifting their advertising budget to Facebook. Coffin’s former company Experian just acquired Techlightenment, which includes Ads API tool Alechemy, so he may of taken the hint.

We expect more Page management companies and traditional marketers to look for access to the Ads API industry this year, either through acquisition, partnership, or internal development. There’s simply too much money to be made in the industry for them to stay out.

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