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| Issue 72 Tuesday, 21st August 2007 |
www.libraryhouse.net
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This Week:
Regulars:
VentureCast Universe
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Dear Subscriber,
The online advertising market is experiencing buoyant M&A and venture capital activity as entrepreneurs and incumbents chase two of advertising’s holy grails: reach and results. Advertisers want their ads firstly to be seen by consumers – and secondly for those consumers to act.
Investors and acquirers have focused firstly on technology to make online ads more relevant to consumers – and thus in theory more effective. This week Kontera, an Israeli contextual advertising firm, raised a $10.3 million round of VC financing. Kontera scans web pages and inserts relevant ad links into each site’s text. With other keyword-based advertising platforms, such as Google’s AdSense, visitors to a website will see ads relevant to that site’s content; but with Kontera, the connection between content and ad is made explicit to the visitor. This increased relevancy means higher click-through-rates for advertisers: one of Kontera’s clients, software developer TechSmith, claims to see click-through rates of over 10% with Kontera, but only 0.3% with its other pay-per-click campaigns.
The drive for more relevance in online advertising may be seen in the M&A market too: in July, New York-based TACODA, which runs a behaviorally-targeted ad network, was acquired by AOL for a rumored price tag of $275 million. TACODA improves the relevance of online banner ads by tracking users’ browsing habits and combining that with its own demographics-based categorisation of websites.
Relevancy is of little use if consumers aren’t looking in the first place, however. With so many entertainment options now vying for consumers’ attention, advertisers are faced with the challenge of ensuring their ads reach consumers, no matter what those consumers are watching or doing.
Double Fusion, based in California and Israel, is one of a handful of startups that serve ads directly into PC and console video games – a mostly-untapped medium for digital advertising. The company’s technology allows advertisers to insert graphical ads directly into gameplay, for example inserting an ad onto a billboard within a game’s 3D virtual world. Double Fusion has also built up an ad network, signing deals with games publishers such as THQ and Eidos to serve ads into their titles.
Last week Double Fusion announced the close of a round of funding from Japan’s Sedona Capital. This undisclosed round comes on top of £22.68 million the company has raised since it was founded in 2004. The company faces competition from online advertising incumbents who have acquired technology similar to its own, however: in 2006 Microsoft snapped up Massive, a pioneer in the space, and in March 2007 Google purchased in-game advertising firm Adscape.
Advertising in a digital environment, where information about users can be collected on-the-fly, has made possible highly targeted advertising which consumers are more likely to act upon. But the technology underlying contextual advertising can always be improved – leaving room for innovative startups like Kontera. Likewise, as consumers adopt new forms of digital entertainment, advertisers will want to follow suit, something startups like Double Fusion are capitalising on.
Pevion Biotech, the Switzerland-based bio-pharmaceutical company, has raised €22m in series A funding from BZ Bank, BB Biotech Ventures, Bachem and CC Private Equity Partners. Pevion uses its proprietary virosome-based technology platforms to develop prophylactic and therapeutic vaccines. The company's development pipeline includes vaccines against breast cancer, malaria and hepatitis C. The investment will be used to advance vaccines in clinical development and further extend the company's portfolio.
Molecular Partners, the Switzerland-based biotechnology company, has raised €11.3m in series A funding from Index Ventures, BB Biotech Ventures, Endeavour Vision and Johnson & Johnson Development Corporation. Molecular Partners owns the exclusive rights to a new class of therapeutic proteins - called DARPins - that are characterised by properties such as very high stability and production yields and multiple specificities within one molecule. To date, DARPins have been generated against a range of disease targets. The new funds are intended to allow the company to advance its portfolio towards the clinic and to expand operations.
1-2-3.tv, the Germany-based interactive television channel, has sold a 14.4 per cent stake to Germany-based pay-tv company Premiere for €10m. The deal was announced just days before the chief executive of Premiere, Georg Kofler, resigned for personal reasons.
Enigmatec, the UK-based developer of enterprise IT process automation products, has raised $12.5m (€9.1m) from Amadeus Capital Partners, Herald Ventures, Pentech Ventures and Kevin Lomax. Enigmatec’s automation platform is designed to allow IT operators to automate, orchestrate, and integrate the processes and tools they use on a daily basis to configure, support and allocate IT resources. The funding will be used to continue expansion of the company's global sales force and to build out the capabilities of its products.
Kontera, the Israel-based developer of in-text advertising technology, has raised $10.3m (€7.4m) in second round funding from Carmel Ventures, Lehman Brothers and Sequoia Capital. Kontera’s main product is a real-time contextual analysis product that finds relevant keywords on a web page and automatically turns them into a link to the most relevant ad from among Kontera's thousands of advertisers. The company plans to use the funding to scale its sales, marketing and R&D operations.
U3 Pharma, the Germany-based developer of targeted cancer drugs, has revealed that it recently appointed Dr Irina Staatz-Granzer as chief executive. Previous chief executive, Dr Karsten Henco, left the company earlier this year. U3 Pharma's two lead programmes, in co-development with Nasdaq-listed Amgen, focus on fully human antibodies and are nearing the clinic as potential therapies for breast, lung and colorectal cancers, among others.
Inforsense, the UK-based provider of software to allow enterprises to orchestrate and optimise their business-critical decision-making processes, has appointed Stephen Allott as executive chairman. Mr Allot has worked for McKinsey, Sun Microsystems and Xerox. From 1995 to 2001 he worked at Micromuse, a London-based software company where he was president, chief financial officer and a main board director. During this time, Micromuse grew from £1m to £140m in turnover, and from 50 to 800 people. He is also the founder and executive chairman of Trinamo, the London-based management consulting firm for technology companies.
Heptagon, the Finland-based developer of wafer-scale micro-optics, has appointed Jan Lobbezoo as chairman. Until March this year Mr Lobbezoo was a board member for more than 12 years at Taiwan Semiconductor Manufacturing Company, the world’s largest semiconductor foundry organisation.
Mirasys, the Finland-based supplier of open digital multimedia management solutions (DMMS) for the security industry, has confirmed that Jukka Riivari recently joined the company as chief executive, replacing Pasi Lehmus who intends to leave the company within the next week.
Akubio, the UK-based developer of acoustic detection technology for the life science research market, has attracted a lot of attention this week. Akubio has developed technology for the real-time measurement and analysis of biomolecular interactions, a vital process in the research and discovery of new biological drugs such as proteins and antibodies. The company is backed by investors including Abingworth Management and [[University of Cambridge Challenge Fund]].
Odersun, the Germany-based developer of solar cell technology, has also received a lot of attention recently. Odersun has developed a thin-film technology for the production of cost efficient solar cells and modules in almost any size or power. Using copper instead of the more expensive silicon, the company produces modules for solar parks and roof mounted systems, as well as customised solutions for buildings and the consumer market. The company is backed by investors including Doughty Hanson.
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