Mobile search specialist JumpTap wins $26M in new funding

By Mickey Alam Khan

August 26, 2008

Meal ticket

Mobile search and advertising company JumpTap Inc. has raised more than $26 million in its fourth round of funding as part of its expansion plans.

AllianceBernstein L.P., a leading global asset management firm, led the Series D round of funding. This marks one of the largest sums raised recently by a mobile advertising services firm.

“We’re at a rapidly growing pace and we’re competing with Google, Yahoo and Microsoft,” said Paran Johar, New York-based chief marketing officer of JumpTap.

“We reached a tipping point in mobile search and advertising where we needed to invest rapidly into the future,” he said.

Existing JumpTap investors also participated in this funding round, including General Catalyst Partners, Summerhill Venture Partners, Redpoint Ventures, Valhalla Partners and WPP Group PLC.

Flying in a new orbit

The funding comes almost two years after Valhalla Partners led a $22 million Series C round in JumpTap.

Announced Oct. 4, 2006, that round also included participation from existing investors General Catalyst Partners, BCE Capital and Redpoint Ventures.

Founded in 2004, JumpTap offers integrated search and advertising services using search behavior patterns with wireless carrier data to deliver a targeted mobile ad delivery system.

Multimillion-dollar menu

The company reaches more than 150 million mobile subscribers through partnerships with 17 carriers and several content publishers.

Carrier focus
JumpTap most recently partnered with Pinch Media to launch an in-application iPhone advertising network (see story).

The news came soon after JumpTap opened a New York office on Madison Avenue and also won business from carrier U.S. Cellular to offer white-label mobile search and advertising services.

Other JumpTap clients include NBC Universal, Fox Mobile Entertainment and TeliaSonera as well as AT&T, Rogers Wireless, Alltel and Telefonica.

JumpTap is based in Cambridge, MA, with European offices in Madrid, Spain and Stockholm, Sweden to service clients in those markets, including TeliaSonera.

Carriers are a key part of JumpTap’s future. News of the new funding round comes in the midst of market speculation that Verizon Wireless is close to inking a search deal with Google.

Mr. Johar cautions carriers on such arrangements.

“The deal has been going on for over one year because a big hang-up has been about Google’s revenue share,” Mr. Johar said.

“The biggest hang-up is whoever has access to the rich customer data will win the mobile advertising market and carriers should recognize the Trojan horse knocking on their door,” he said.

Of course, that doesn’t mean that carriers shouldn't strike partnerships. JumpTap, for example, has one with AT&T, the leading carrier nationwide.

“We have expanded our longstanding relationship with AT&T and have created a partnership that deepens that relationship,” Mr. Johar said.

“We believe this new structure will change the industry status quo and be a game-changing event as to the way business is conducted and how carriers interact with their customers,” he said.

“We will be unveiling the specific details over the next coming weeks.”

Bit pipe or big pipe?
Carriers have one of three ways they can take to make their presence felt in mobile advertising, Mr. Johar said.

One option is to become a bit pipe, conceding the mobile ad market to established Internet players such as Google, Yahoo or Microsoft.

Another option for carriers is to hedge their bets and work with companies such as JumpTap to manage, develop and leverage their customer data.

“We’re doing this currently with many of our partners,” Mr. Johar said.

“In this case, some of our partners use a Google, Yahoo or Microsoft for the actual search, but utilize us to manage and target their data,” he said.

The final option is to use mobile search and advertising service providers as a monetization platform, using their mobile search technology and ad sales force. This is what the service providers would prefer, too.

“This is the only option for carriers who want to reinvent themselves as a media-centric organization and control the mobile advertising ecosystem,” Mr. Johar said.

Meanwhile, JumpTap will use the extra cash it has raised its profile in the mobile search and advertising space.

“We’re going to utilize this funding to reinforce our product positioning, our technology, into sales and finally into our ad operations – making sure the workflow is going efficiently to handle the ongoing demand,” Mr. Johar said.

“I think this is an exciting time,” he said. “The iPhone is revolutionizing the marketplace and right now competing against Google and Yahoo and Microsoft makes it very important to secure our positioning.”