November 15, 2016 / 9:40 AM / a year ago

Axel Springer's digital ads unit Bonial bets heavily on U.S.: CEO

BERLIN (Reuters) - Axel Springer’s digital ads unit Bonial wants to triple its active user base in the United States as it hopes to ride a digitalization wave in the retail sector, its chief executive told Reuters.

“In the coming years we want to grow to 10 million active users,” Christian Gaiser said in an interview. The company currently has an active user base of 3 million in the United States which compares with its global base of around 25 million.

Bonial connects consumers and retailers via the internet and smartphones by alerting users to discounts at retailers near them. The company receives money for every user click on an ad.

The location-based aggregator of flyers, coupons and catalogues works under the brand name Retale in the United States, with groups including Walmart and Target among its customers.

Bonial, which is 72.5 percent-owned by Axel Springer, is active in 11 countries, of which the United States is the most important.

“All developments we see here will arrive in other countries in about two to three years,” Gaiser said, who founded the company in 2008, at the age of 22, but added that he currently had no plans to expand to further markets.

Axel Springer, the publisher of Europe’s top-selling Bild newspaper, bought its stake in Bonial in 2011 as part of a shift to more digital media and online classified ads as it seeks to offset a decline in print circulation.

It has for instance bought Business Insider, an online business news portal, and digital classified ads portal StepStone.

So far Axel Springer has invested around $90 million in Bonial, Gaiser said. Bonial’s German business, where it operates portals such as kaufDa and MeinProspekt, has been profitable since 2011, the executive said.

He declined to say when Bonial’s U.S. business would turn a profit. “What we earn in our markets, we reinvest in growth,” he said, referring to Bonial’s general strategy.

Reporting by Klaus Lauer; Writing by Harro ten Wolde; Editing by Maria Sheahan

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