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Six months since spinning out of London-based ad firm Unanimis with $5 million in initial funding, open source advertising server Openads landed $15.5 million in a second round led by Accel Partners of Palo Alto, Calif., to launch a hosted version of its software and to accelerate expansion into the U.S. Accel joins Index Ventures of London, First Round Capital of West Conshohocken, Pa., Mangrove Capital Partners of Luxembourg and O'Reilly AlphaTech Ventures of San Francisco in backing Openads, which has been available as an open-source project for about eight years, and which Unanimis has developed commercially over the last year and a half. The money will go to expanding features in the company's downloadable free software and building out its hosted product and community of users, before fully developing its revenue model. Openads' software allows Web publishers to manage their advertising with independent tools scheduling, management and tracking of online campaigns, and supports a variety of ad formats and advertiser types including direct advertisers and networks. The company's hosted version will eliminate the need for users to run the software on their own servers. Openads CEO James Bilefield joined the company from first round leader Index Ventures' portfolio company Skype Ltd., which while not an open-source project, built its Internet telephone services virally as an open-user community. He said that first-round funding enabled the company to establish an independent management structure and begin staffing beyond its technical team to build a larger community of users. "This funding for the hosted version expands the addressable market beyond just power users," Bilefield said. "The user base has grown virally, and we are keen to continue that, and we want to take advantage of some consolidation of advertising server technology in the last 12 months that, frankly, has left few independent companies out there." Mountain View, Calif.-based Google Inc.'s $3.1 billion acquisition of Doubleclick Inc. is still pending but is expected to go through, and it has spurred other acquisitions in the ad-server industry, including Redmond, Wash.-based Microsoft Corp.'s purchase of the target's rival, aQuantive Inc. for nearly $6 billion. The deal comes as Index Ventures basks in the success of its most successful open-source exit, with the $1 billion sale of database maker MySQL AB to Sun Microsystems Inc. of Santa Clara, Calif., announced Wednesday. Index also is an investor in Zend Technologies Inc. of Cupertino, Calif., a leader in commercializing the PHP web design language, and Index general partner Bernard Dalle said the firm's investment in Openads is aimed at accelerating the growth of the open-source community using the software and ultimately offering greater features through commercialization. "We have been believers in open source for some time, and there is already a lot of traction for Openads," Dalle said. "The aim is to make Openads to Doubleclick what MySQL is to Oracle." Openads did not disclose terms of the new investment, but Dalle said the new money came in at a significant increase in valuation to the company's first round. Dalle said the company set out to target U.S. investors as part of an effort to build the company's U.S. presence. With the investment, Andrew Braccia will join the Openads board of directors, and Dalle said there may be additional moves at the board level to increase U.S. involvement. Braccia said growth of the online advertising market requires more sophisticated management tools, and that Openads open source record positions it uniquely in the industry. Bilefield said Openads used no outside financial adviser for the round, and the company had legal work on the deal from Angus Miln of Bird & Bird in London. Christopher Grew of Heller Ehrman LLP in London represented investors.  Deal Video
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