By Arun Natarajan
A recent article in IBD’s Investors.com highlights the strong rise in the popularity of video advertising among brand advertisers in the US, as well as the potential headroom for growth.
The article quotes –
…Online video ads are more engaging than other types, say ad executives. Woolford says a good example is Toyota‘s “Swagger Wagon” ads for its Sienna minivan. In one, a father and mother relate, in rapper style, about how cool their minivan is. It’s a viral hit, nearing 1 million views on YouTube in two weeks…The rise of more portable devices such as Apple’s iPad tablet computer will only accelerate the amount of video viewed online, which should boost ad rates, says Retrevo co-founder Manish Rathi.
- Investors.com Site
This trend should spell good news for Indian VC funds Helion Ventures and Nexus Ventures which have, between them, invested in three cross-border companies that operate in the online video ads space – vdopia, jivoxand komli. Amit Bhartiya, business head of online audience measuring platform Vizisense (a part of Komli media) told The Wall Street Journal that any investor who believes in the online advertising growth story will have to focus on all touch-points. “The excitement about video advertising is around engagement. Previously internet was focused on the print dollar now it has a real chance of leveraging the television creative and dollars.” Mr. Bhartiya also said that Komli, which represents facebook in India, has seen more people opt for video than static banners. In mature markets, like the U.S., vdopia has been able to garner significant market share, because they have been able to eat into Run of Day-Part inventory, the lowest common denominator in television advertising.
Helion Ventures invested in Jivox in 2008 and Komli in 2007. Nexus Ventures had invested $4 million in Vdopia, in 2008. Vdopia has almost 80% market share and have done over 200 campaigns in 2009. In an interview on ChannelTimes, Vdopia’s Saurabh Bhatia laid out aggressive India plans, specifically targetting mobile video advertising in India.
Typically, funds investing in U.S.-based companies will have to justify the India connection to their Limited Partners. Given the significant number of U.S.-headquartered companies in the portfolios of Helion Ventures and Nexus Ventures, these funds are clearly able to justify the combination of Silicon Valley innovation and a Bangalore back-end. Plus, for the portfolio companies, their early presence in India would also enable them to be better prepared to tap into future growth in the Indian market, compared to their completely US-focused competition.
Another fund which has been playing the cross-border theme consistently is the Pramod Haque-led Norwest Venture Partners which recently exited its investment in New York- and Mumbai-based financial research BPO, Adventity, via a trade sale. (NVP has also recently announced its latest Indo-U.S. cross-border investment in Ahmedabad, India, and San Francisco-based product design firm, Lumium.)
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India
1 comment:
It would be interesting to track performances of both revenues and valuations of investee companies from the well known VCs. Eg. it has been 4 yrs since investment in the video properties, and 3 yrs since investment by Haque/ NVP in the design consultancy. How are they doing now financially?
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