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September Funding Flows Toward Mobile

October 26, 2006 |

Of the 39 digital media startups that received venture capital funding in September, 15 are developing products and services around mobile devices.

That factoid comes from San Francisco-based Rutberg & Co., which keeps tabs on venture capital and merger events involving digital media companies. (See Video Startups Top VC Funding.)

"The pace of venture capital investment in the digital media industry remained brisk in September," Rutberg analyst Peter Daley tells Light Reading. "There was significant investor interest in the mobile marketing and advertising category."

The 39 funding rounds that took place during September raised a total of $313 million. Companies that develop technology that creates, enables, or delivers some kind of mobile content took $153 million of that total. In several of the funding events for mobile-focused companies the funding amount was not publicly disclosed.

"Advertising infrastructure" companies took $58.2 million in funding during September. "Content service providers and retailers" took $72.5 in funding. These startups either sell specialized content for mobile devices, or help deliver advertising around that content.

"Companies in the content service providers and retailers sector raised a disproportionate 23.2 percent of all digital media venture capital across just 3 deals, owing to the $60.5 million financing of smartphone content and applications retailer Handango," Daley notes. (See OnMobile Secures $27.8M .)

Handango's was by far the largest round of the month. Mobile users can go to the Handango Website and buy the Merriam-Webster Collegiate dictionary for their Blackberry, or some video games formatted especially for a smartphone. The company got a first round of funding in 2000.

Rutberg & Co. notes that it acted as exclusive financial advisor to Handango in the funding transaction.

The next largest September funding was the $25 million round for mobile marketing firm Air2Web. Air2Web works with companies and wireless carriers to develop and deliver multi-faceted marketing campaigns to mobile users.

The third large funding event Daley refers to went to San Francisco-based FrameFree Global, which develops products for authoring and compressing motion imagery.

Rutberg also reports 36 acquisitions of digital media companies during September.

— Mark Sullivan, Reporter, Light Reading



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