Media attention around startups often focuses more on the raising of new funding – especially venture capital. But some emerging ventures are making headlines by taking on debt rather than selling a bigger stake in the company.

The latest is Appia, which announced the raising of $5 million in debt just over two weeks ago.

When Jud Bowman decided to further ramp up his global expansion efforts at Appia, the veteran entrepreneur chose to do so by through debt because he wanted to avoid getting “really diluted.” Appia’s growth continues to be quite strong. The company ranked No. 1716, with 226 percent growth to $10.4 million, on the latest Inc. 5000 list. And a recent report from Ericsson documents in part why Appia is growing – the smartphone market with consumer demand for apps and data is exploding.

Bowman did accept $1.5 million in venture funding just over a year ago on what he described as favorable terms. He later added his first CFO (Tim Oakley), raised $5 million in debt, and added another senior  executive (Chief Product Officer Jamie Fellows) as Appia continued togrow. 

WRALTechWire talked with Bowman about why he sought financing now – and why go the debt route despite a proven record as a venture fund raiser.

  • Why raise more financing at this time?

We feel the best time to raise is when you don’t need it.

From our lens, having a strong balance sheet is critical to the success of an organization.

We had an opportunistic fundraise opportunity in front of us to bolster our balance sheet, from an investor we’re already working with, and we decided to go ahead and take the funding.

  • Why choose debt over equity financing?

It’s really about dilution. With equity funding you can get really diluted.

Debt funding gives us a way to put additional capital on the balance sheet without the dilution we would have from raising equity funding.

  • Do you plan additional hiring? If so how many and in what areas? How many positions in Durham?

The answer is absolutely yes. It was one of the primary reasons for taking the funding, so that we can accelerate growth.

A key component of that growth is expanding our team.

Our plan for 2014 includes hiring across technology and sales through expansion of our San Francisco and Durham offices, as well as creating more offices globally.

We don’t have a specific number currently because we are working through our plan but we expect the same momentum in 2014 as we’ve seen here in 2013.

  • I’m sure you saw the latest forecast from Ericsson about smartphone and data growth. What is your research telling you about the marketplace and the opportunities? You are having to scale up in order to capitalize on these increasingly valuable opportunities?

Smartphone usage is overtaking desktop at a rapid pace.

Along with that app development is continuing to explode, with more than 2 million apps now in Google Play and the App Store. App discovery is getting harder and that is the problem that Appia solves.

We want to ensure we are providing a solution that creates higher value user acquisition for mobile advertisers. It’s an exciting time, there is a real opportunity to be very smart with your mobile advertising dollars and we want to be the leader in the space.

We are continuing to expand our technology and team to evolve with the growing demands of the mobile advertiser.

Whether that’s creating unique advertising formats or expanding smart data capabilities, we are evolving our solution to keep pace in the market.

Appia has created a mobile user acquisition network that focuses on solving the app discovery challenge while providing higher lifetime value users. Appia spans the entire mobile advertising ecosystem—from data partners to mobile exchanges; and our performance-focused, predictable mobile advertising solution covers advertisers, publishers and developers.

  • The information published at the site and the acknowledged fees for downloads, the growing number of them – does this reflect a change in business strategy and new or enhanced offerings from Appia? Are you changing and expanding your approach?

Being the leading app install network has been our ongoing strategy since we made a market shift in 2011 to focus on helping solve app discovery.

We believe app discovery will continue to be an ongoing challenge that will continue to grow as the number of apps continues to increase.