Following a seed round of funding from Nexus Venture Partners (formerly Nexus India Capital) last year, video advertising network VDOPIA has raised a Series A round of $4 million from the same fund. According to a filing with the American Securities & Exchange Commission, which was first reported by VentureBeat last week, the total amount was $$4,714,302. Speaking to MediaNama, Saurabh Bhatia, co-Founder and CBO at VDOPIA, clarified that the current Series A round is $4 million, and the rest is from a convertible seed note, which was a part of the seed round of funding. VDOPIA has appointed Rohit Sharma, a Silicon Valley entrepreneur, and former EVP and CTO of ONI Systems as President & CEO.
Why Does VDOPIA Need The Money?
Bhatia says that VDOPIA is raising the money primarily to fuel its expansion into the US Market, for its iPhone video advertising network iVDOPIA: “There’s a need to expand to sales & marketing (for iVDOPIA) in the US, R&D in India, expand sales and oeprations in India, and exploring new markets. We’re eying the Latin American market.” He declined to comment on how much of the funding is being allocated to a US expansion, saying that that is going to be looked at quarter on quarter, depending on market requirements.
Indian Market Trends
VDOPIA Growth: According to Bhatia, among their publisher network is the entire NDTV group, TEN Sports, NEO Sports with Cricket Nirvana for the India-Australia series, Zee News and Web18. We’re the only ones who have livestreaming. Metacafe in India. ZEE News, Web18. On Web18, exclusivity isn’t in the picture. VDOPIA claims 60% marketshare, in terms of publisher reach, for pre-roll advertising , given that YouTube, the largest video serving platform in the country, isn’t serving pre-rolls yet. Bhatia claims that over the past three quarters, VDOPIA has seen 70-100% growth each quarter. Now that kind of percentage growth is usually seen on a very small base. Bhatia clarified that that was the situation last year, but the company saw growth in revenues in the Jan-Feb-March quarter, which he claims was the tipping point for revenues for VDOPIA in India. In June, the company added Metacafe as a publisher, which he says has an India inventory of 20-25 million views per month.
Growth Drivers: Bhatia says there has been month on month growth for on-demand viewership of content, like for the NDTV group, and publishers are putting up new content on demand regularly. He expects the growth in inventory to continue.
The other key driver for growth has been event based online live-streaming: the company claims they got a huge boost during the Compaq Cup with TenSports & NBC Universal, with brands like Airtel, Xerox, Nokia and Samsung as sponsors. VDOPIA claims that the Compaq Cup saw 1 million unique streams across matches, and average viewership 59 minutes, hence a total of 10 million hours. “Even media companies are looking at these complementing their media revenues. and We’ve added livestreaming ad insertions, talk to me ads, and also expanded our publisher network.
Revenue Models: On whether we will a deterioration of the model (at least from a publishers perspective) to CPC in video advertising, Bhatia said that CPC deals don’t make much sense. “We’re running the ads on brand sales content, and it’s comparable to TV. A few clients who have come back to us for TV type deals, for reach. Ours is a CPM or a CPV (cost per view, when ads are viewed till completion), and with live streaming it’s Cost Per Spot.
Responding to our question about whether we’ll see the end of exclusive deals, and whether VDOPIA offers any minimum guarantees for exclusive deals, Bhatia said that with exclusivity, they provide certain addons like dynamic skin branding which increases yield per video. They don’t pay a minimum guarantee to clients, but exclusivity allows deeper technology integration. Bhatia believes that the future belongs to exclusive deals since, unlike banner advertising, video content has these opportunities involved at a tech and brand positioning level.
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