Bangalore based July Systems has raised $7 million in Series C funding led by Intel Capital, alongwith Sequoia Capital and Footprint Ventures. The details of the investment were not disclosed, but this probably isn’t your usual Series C round: the Rajesh Reddy (in pic) founded company changed its business model in 2005, much after its $8 million investment from Westbridge Capital (now Sequoia Capital India) and Acer Technology Ventures.
Not Your Typical Third Round
This Forbes India article has details of the issues that July Systems went through after its initial model didn’t work out, and mentions that at one point, the investors wanted to sell the company to get back whatever they could. A subsequent investment came through from Edelweiss co-founder Venkat Ramaswamy, Galleon Capital Raj Rajaratnam and, well, Sequoia Capital. So this isn’t your typical third round of investment, since the company has come back from its failed initial model, which it apparently spent its first round of investment on.
On a brighter note, Reddy had also told Forbes that the company has reported its first cash profit, with its new model. The press release suggests that July Systems has achieved 300 percent growth in revenues, but that kind of percentage growth is often on a low base.
Our Take: July’s Future Is In Mobile Advertising
But what is July System’s new model? July helps media companies publish their content on the mobile web. Its big media clients include Turner, ESPN Cricinfo, Univision, Discovery Networks, Time, CBS, NBA and NASCAR in the US, and NDTV Convergence, the Network18 group (CricketNext, IBNLive etc), HT Media (Mint) in India.
What July Systems does, in my opinion, is what potentially Mobile Internet advertising companies like AdMob, InMobi etc should be doing; there is clear synergy between creating inventory by enabling media companies to go mobile, and monetizing that inventory with advertising.
I foresee two possibilities in July future, provided the company is able to acquire enough publishers: either they will be bought out by a mobile advertising firm, or get into the mobile advertising business with a network. In the meantime, I wouldn’t be surprised if Google creates a do-it-yourself mobile publishing platform, given their focus on mobile advertising.
What July Will Use The Funds For
July Systems intends to use the funds for growing its business in North America and AsiaPac, invest more into its Mi platform, rich media advertising technologies, real-time interactive video and micro-payment management systems.