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Wednesday, Sep 27, 2023

Veritone Takes AI-Centric Business to Costa Mesa

Artificial intelligence technology and media firm Veritone Inc., fresh off an initial public offering in May that raised $37.5 million, is moving its headquarters to a larger space in Costa Mesa.

The company, whose products help companies with advertising and ad placement, among its other business lines, signed a nearly 38,000-square-foot lease late last month at The Met, a multibuilding office complex on Anton Boulevard a few blocks from the South Coast Plaza mall.

It’s one of the largest office deals in Orange County in the past quarter, and a big step up in local space for the company, which employed nearly 160 people as of midyear.

Its current headquarters in the Lido Marina Village area of Newport Beach runs about 10,500 square feet.

The new one, at 575 Anton, will “help make room for our team and support our expansion plans,” Chief Executive Chad Steelberg said during the company’s quarterly earnings call with analysts last week.

The company’s website currently has listings for nine new open positions, most of them local; along with OC, it has offices in Los Angeles, New York, San Diego and San Francisco.

Local open positions include a mix of engineering and marketing jobs.

The company added nine people last quarter, including five in sales, Steelberg said.

The new Costa Mesa location should be large enough to hold about 150 employees, based on typical office configurations. The new lease gives Veritone the right to lease additional space at the complex in the future, if needed, regulatory filings show.

Shares Down

Despite the IPO and its growing local presence, Veritone is still very much a startup, particularly in terms of sales and profitability.

The company, which began operations in 2014, posted $4.1 million in sales last quarter, up from $2 million during the same period last year.

The bulk of the sales relate to its ad placement business. Customers include 1-800-Flowers.com, which uses Veritone’s software to “to ensure speed, transparency and accuracy of their broadcast advertising spends,” the company said.

Veritone’s software is designed to provide artificial intelligence insights “to transform and analyze unstructured public and private audio and video data for clients,” or what’s popularly known as big data, it says.

It recently established a new operating division to help government agencies analyze audio and video files.

Like most startups, Veritone is far from posting a profit. The company reported a $7.8 million loss from operations last quarter after losing $6.7 million the prior quarter.

“We do not expect to achieve profitability for the foreseeable future,” the company noted this year in its paperwork for the IPO, which provided about $32.5 million in proceeds for Veritone.

The company’s market value is about $130 million. Its shares are down by about 35% since the IPO.

Veritone’s largest outside shareholder is Newport Beach-based patent licensing firm Acacia Research Corp., whose investment in its common stock was valued at about $45 million as of midyear. Acacia also held warrants worth an additional $4.7 million in late June, according to regulatory filings.

Acacia owned 31% of the company’s stock following the IPO, roughly the same amount as founders Chad Steelberg and his brother Ryan, who serves as president.

The brothers have been involved in a number of other local tech businesses, including advertising radio company dMarc Broadcasting Inc., which was sold in 2006 to Google Inc. in a deal eventually valued at about $400 million.

Met Upgrades

Veritone’s new, 82-month lease in Costa Mesa begins in February, though the company is already moving into temporary space at The Met while its headquarters is finished, according to regulatory filings.

The Met is owned by a venture between Madison, N.J.-based Prudential Real Estate Investors and McCarthy Cook & Co. in Costa Mesa, which bought it in late 2015 for a reported $233 million.

The new owners have been putting millions more into rehabbing the three 12-story offices at what used to be known as MetroCenter. Additions include creative-office flourishes and extensive outdoor amenities.

Veritone will pay about $3 per square foot in monthly rent by the second year of the lease, which includes 3% annual increases after that, according to the company’s regulatory filings.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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