Indoor Direct raises $22.5 M to expand ad network

February 22, 2009 by Dave Haynes

Everyone who is trying to raise money in this marketplace knows it is a really tough slog, but deals are indeed closing.

Consider Addison, Texas-based Indoor Direct, which just closed more than $22 million in Seies B financing for a mass rollout of its network in the restaurant sector.

As reported Friday in PEHub (PE is for private equity):

Challenger Capital Group, Ltd., a Dallas-based full-service investment bank, announced today that it has secured $22.5 million of Series B and Series B-1 preferred equity to fund the mass rollout of Indoor Direct, Inc.’s (“IndoorDIRECT”) digital media network to over 1,000 locations nationwide.  Syncom Venture Partners led the investment and was joined by Northwood Ventures and Poseidon Enterprises.

IndoorDIRECT, headquartered in Addison, Texas, and founded in 2006, is a dynamic digital out-of-home media network that reaches fast food and casual dining customers via its two proprietary in-restaurant networks.  IndoorDIRECT provides restaurant partners with a tool to increase sales and cut costs, and provides advertisers with a medium to reach targeted consumers who are in-action and engaged.  IndoorDIRECT currently has over 400 locations installed in top DMAs nationwide, and proceeds from this transaction will be used to increase the footprint to over 1,000 locations nationwide.

“Challenger was critical to helping us realize this important step in the evolution of our company,” said Fred Margolin, CEO of IndoorDIRECT.  “The Challenger team went the extra mile to secure this funding with top-quality partners in a challenging financing environment, and we are pleased with the end result.   Now we look forward to the future growth of our company while realizing significant value for our shareholders, restaurant partners and media customers.”

“This transaction represents a significant growth catalyst for IndoorDIRECT, and Challenger is proud to have served as the company’s financial advisor and placement agent,” said Jeff Milkie, Challenger Director and lead banker for this transaction.  “We believe in IndoorDIRECT’s vision and are impressed with the strength and depth of their management team.  We look forward to the company’s future growth and development via this partnership with top venture and strategic partners Syncom, Northwood and Poseidon.” 

Indoor Direct rolls out and maintains the networks on its own nickel, so the network would appear to be relying entirely on advertising and sponsorship revenues to make a go of things. Soft is a probably an optimistic description of that ad market right now, so I can only assume the Indoor Direct guys really got their business plan nailed in order to spring this kind of cash loose.

CEO Fred Margolin is a Wharton and Harvard MBA guy, and ran a big restaurant industry REIT, so he is absolutely not one of those “we’re going to 1,00 sites a quarter” dreamers we all run into. 

This financing has to be a hopeful sign for plenty of people I know who are trying to raise the cash needed to roll out in their own targeted vertical.