Portfolio News

Ad tech firm Vserv raises $15 million

Live Mint

March 3, 2015

By Mihir Dalal

The investment marks the India entry of hedge fund Maverick Capital, which manages more than $8 billion worldwide.

Mobile advertising technology provider Vserv Digital Services Pvt. Ltd has raised $15 million from hedge fund Maverick Capital and venture capital firm IDG Ventures India, signalling a selective revival of investor interest in local ad tech firms.

Vserv, which has now received a total of $18 million including the latest investment, will use the funds to further expand in India, southeast Asia and other emerging markets by increasing its sales and distribution teams and improving its technology.

The investment marks the India entry of hedge fund Maverick Capital, which manages more than $8 billion worldwide.

Online ad tech firms, which compete with Google, Inc. and Facebook, Inc. for online ad spends, work with marketers and online publishers to provide compelling advertisements to shoppers and then help place the ads on various sites and mobile platforms. They try to get detailed data on shopping patterns by collating users’ purchases and browsing habits on sites other than Google and Facebook.

Vserv analyses and integrates data from multiple sources such as telecom operators, offline and online retailers, consumer goods companies and mobile app developers to deliver specific, targeted and real-time ads on mobile platforms. It has data profiles of over 120 million mobile Internet users in India and over 500 million across all markets, chief executive officer Dippak Khurana said.

“Google has intent data, where consumers show their intent to buy products while Facebook has interest data, indicating various interests of users. However, both capture data through online (or mobile) interactions only. By tying up with a variety of consumer-facing companies, we’re at the forefront of building a smart data platform that can merge both online and offline data on intent and interest. Apart from this, we’ve also built a robust technology on cloud that transforms terabytes of big data to smart data in real time, delivering precise ads to mobile Internet consumers.”

Although the future of ad tech is far from clear, investor interest seems to have revived in these firms, once seen as unprofitable bets. Some ad tech start-ups are seen as acquisition targets for top e-tailers such as Flipkart and Snapdeal, large technology firms such as Facebook and Twitter, Inc. and even international advertising agencies. Ad tech firms such as Vizury Interactive Solutions Pvt. Ltd, Amagi Media Labs and AdNear Pte. Ltd all raised $10-20 million each over the past nine months.

Vserv shifted focus toward building technology to capture and analyse data on the mobile over a year ago and is now “fundamentally differentiated by this capability” among ad tech firms, said Manik Arora, managing director at IDG Ventures India.

“Leveraging its partnerships with leading companies from various sectors and its mobile focus, Vserv has rapidly built one of the most valuable data sets on Indian consumers and now extending into south-east Asia consumers. It is great to see Maverick, who understand mobile and marketing globally, invest in Vserv for this reason,” Arora said.

IDG has had some success with betting on ad tech firms in the US and China in the past; its US portfolio firm Blue Lithium was bought by Yahoo for $300 million in 2007, and in the same year, its China-based portfolio firm Allyes was sold to Focus Media for $225 million in 2007.

The VC firm believes that India is now the next large market for ad tech and Big Data companies, partly because of the country’s large technology talent pool. Apart from Vserv, IDG’s Arora has also backed ad tech firms Ozone Media and Silverpush, both of which sell to US clients but work out of India.

“India will be differentiated in the advertising world globally due to its strength in data analytics, serving both emerging markets and developed markets like the US,” Arora said.