Mark Menell has seen the numbers and knows the online advertising industry is seeing a slowdown like all other forms of advertising. But that didn't stop the partner at
Rustic Canyon Partners from investing in
GoFish Corp. [
GOFH] an online advertising firm focused on youths and their parents. Rustic Canyon (also an investor in The Deal LLC), along with Panorama Capital and Rembrandt Venture Partners invested $22.5 million in a private placement in the publicly-traded company.
Menell believes GoFish is not exposed to the areas that should see the greatest drop in online advertising spending, anything to do with finance, and instead is well positioned in high growth areas such as online games.
"We would agree the online advertising category will be flat or slow down, but more in finance, automotive, real estate and the like, where GoFish has built a foundation around branded advertisers in consumer packaged goods, entertainment and categories that are continuing to grow and where branded advertisers continue to shift from offline to online," he said. "The underlying properties GoFish works with continue to grow at real nice rates."
Rustic Canyon is heavily involved in startups targeting the online games category, which is where GoFish has had the most success. The company has advertising placement deals with casual gaming Web sites such as
Miniclip Ltd. and
HallPass Media Inc. and kid-centric social networks like
WeeWorld.
We've yet to meet a VC who didn't boast about the management team of a portfolio company and Menell didn't disappoint, calling GoFish's team "world class." In this case, we're inclined to believe him. In June, the company
named digital advertising agency Tribal DDB Worldwide founder and CEO Matt Freeman as its chief executive, giving it a well-connected person in the digital advertising realm. --
David ShabelmanSee Dec. 4 funding announcement from GoFish
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