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OpenX secures $10M Series C, new backer DAG

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Published May 26, 2009 at 8:05 AM

cadogan,tim125x100.jpgOpenX Technologies Inc. has raised a $10 million Series C, despite being in the enviable position of not needing more cash. The ad server and exchange developer has raised a total of $30.8 million.

"We raised $15.5 million at the end of 2007 and still had a chunk of that left, so we didn't have to raise money," OpenX CEO Tim Cadogan tells The Deal. "But if it's generally true that it makes sense to raise money when you don't need it, in this environment, it is triplely true."

OpenX has grown quickly since closing its Series B. OpenX now serves 300 billion online ads a month and is used by 38,000 publishers on 150,000 Web sites, according to the company. In April, the Pasadena, Calif., firm launched the OpenX Market, an exchange that allows organizations to buy and sell ads in an online auction format.

While many startups are having trouble attracting new investors, with this round, OpenX adds DAG Ventures in the lead role. Also participating are existing backers Accel Partners, Index Ventures, Mangrove Capital, First Round Capital and board chairman Jonathan Miller (the newly appointed chief digital officer of News Corp. [NYSE:NWS.A] and the former CEO of America Online).

Although he entertained conversations with other VC firms that approached him, Cadogan was drawn to DAG Ventures for two reasons. The Palo Alto, Calif., VC firm co-invests frequently with existing investor Accel Partners, also of Palo Alto.

Perhaps of even more importance, many of the companies in DAG's portfolio share traits with OpenX. Cadogan mentioned publishing company Glam Media Inc., search marketer Marin Software, search engine developer Kosmix Corp., local business search provider Yelp, video ad network YuMe and open-source messaging and scheduling software maker Zimbra (acquired by Yahoo! Inc. [NASDAQ:YHOO]).

"There are very few innovative, open, online advertising platforms that already have global scale," says DAG Ventures managing director Nicholas Pianim. "In OpenX, we see great potential to build a significant business on this foundation. This combined with the exceptional team that Tim has assembled and their flexible capital model make OpenX a truly attractive investment opportunity."

OpenX will use the new funds to expand its products and services and to accelerate growth. - Mary Kathleen Flynn

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