VC players back $45m PubMatic mezz round

Under a real-time system, users' cookies are tracked automatically and matched with advertisers' specific requirements. Whoever bids highest, wins the slot - and it all happens in the blink of an eye.

Through RBT technology advertisers can spend less to reach more of their target consumers. According to International Data Corporation, the global market for the technology will be worth $6.5 billion by 2015.

This explains why PubMatic, a real-time media selling platform that helps publishers automate the process of evaluating and selling their advertising inventory, is a popular among VCs. Last week, Nexus Venture Partners and Helion Ventures, participated in a $45 million round of mezzanine/pre-IPO financing for the company alongside fellow existing investors Draper Fisher Jurveston and Silicon Valley Bank. The round was led by new arrival August Capital.

"We're thrilled to partner with PubMatic to increase their investment in superior technology and top executive talent to more effectively serve premium publishers," says Eric Carlborg, a partner at August Capital, who joined PubMatic's board as part of the investment. "The advertising automation space has huge growth potential."

PubMatic was established in India in 2006, when the country's digital advertising market was still in its infancy. The company raised $6 million in Series A funding from Nexus, Helion and DFJ in 2008 and moved to the US in search of better growth opportunities. The same investors participated in a $3.5 million second round and then also joined for the $7.5 million third round.

PubMatic has seen revenue growth in excess of 150% year-on-year, broadly tracking RBT's rapid penetration of the online display advertising market. The latest investment will be used to support expansion in Europe and Asia.

"Digital advertising started in the US but now we have seen a significant market in Asia, which is small but growing very fast," says, Naren Gupta, co-founder of Nexus Venture Partners. "The India market has been growing annually at over 100% for the last few years."

PubMatic's next step is likely to be an IPO.

Speculation about a listing began last year when former Kodak Gallery CFO Steve Pantelick joined and said that his experiences helping firms expand globally and prepare for IPOs were a good fit for PubMatic.

Gupta notes that the timing depends on market conditions, but there he thinks the company would be a hit with US investors. "Investors there understand the demand for such technology; Asia is also an option, given the company's founders come from India."

 

 

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• Topics
• Media
• Expansion
• South Asia
• India
• Media
• Growth capital
• Draper Fisher Jurvetson