Collective Media Closes $20M Series B Financing

Online advertising network Collective Media Inc. said Monday, April 13, it has closed a $20 million Series B round led by Accel Partners.

Founded in 2005, New York-based Collective works with major brands, including Coca-Cola Co., General Motors Corp. and Home Depot Inc., to place ads on popular Web sites published by Gannett Co., Hearst Corp., Tribune Co. and others. Previously, Collective raised an aggregate $3.5 million via a 2006 angel round and a 2007 Series A round led by Greycroft Partners LLC with participation from iNovia Capital. INovia also is participating in the new round.

Collective said it will use the new capital to develop its technology, expand internationally and possibly make some acquisitions. Last year, Collective bought Personifi, which makes semantic software that analyzes key words.

While Collective faces competition from much larger players, such as Microsoft Corp., Time Warner Inc.'s AOL, Google Inc. and Yahoo! Inc., the startup's growth is impressive. According to CEO Joe Apprendi, the company's revenue grew 200% last year.

"People say the display market is flat or slowing," said Apprendi. "But there's a shift in how money is being spent from targeting premium sites to targeting specific audiences across sites. Collective marries the who with the where."

ComScore Inc. now ranks Collective the 19th-largest ad network in the U.S., up from 21st last year.

"The ComScore rankings are interesting," said Accel Partners partner Sameer Gandhi. "But what's hidden is that the company is very focused on the high-end, or premium, part of the display ad market. In that particular area, where they sell much more targeted solutions based on their 'AMP' platform, they are growing extremely rapidly, and that's the fastest-growing segment of the market."

The difference between Collective and dozens of other ad networks is that its approach is "audience-centric versus site-centric," said Gandhi, who has joined Collective's board.

The investment in Collective is the first for Accel's $480 million Growth Equity Fund, which closed in December. Accel is best known for taking an early stake in social networking platform Facebook Inc. The firm, which has offices in Palo Alto, Calif., London and Bangalore, India, holds stakes in real estate site Trulia Inc., mobile advertising marketplace AdMob Inc. and online video distributor Brightcove Inc. Past exits include RealNetworks Inc., Foundry Networks Inc. and Macromedia Inc.

Another online ad company, the Rubicon Project, also announced funding Monday. Rubicon added $13 million in venture funding, bringing total financial investments to $33 million. The follow-on round includes $5 million in venture funding from existing investors Clearstone Venture Partners, Mayfield Fund and IDG Ventures Asia, and $8 million in venture debt from Silicon Valley Bank. The funding will fuel business growth initiatives including strategic acquisitions, research and development, infrastructure and international expansion, the company said.