Sources inform "Globes" that Israeli start up Peer39 has completed a third fund-raising round, raising $10.5 million. Israeli venture capital fund Evergreen led the round, alongside existing investors in the company Canaan Partners, Silicon Valley Bank, JP Morgan, and Dawntreader Ventures. Since it was founded, the company has raised a total of $22 million, including the current round.
Peer39 was founded in 2006 by Nir Bareket and Amiad Solomon, the company's CEO. The company aims at the online advertising market. It has developed a platform for monitoring content and advertising on the web. It has algorithms that enhance the value of content by understanding the content on a page and placing suitable advertising alongside. The company has a development center in Israel.
The initial capital was invested by Daniel Ciporin, currently a partner at Canaan Partners and formerly CEO of Shopping.com, and Jonathan Medved, formerly a partner at Israel Seed Partners.
Solomon told "Globes" today, "Unlike contextual advertising, which looks for a keyword, our system can decode the meaning. For example, the words 'Tiger Woods' could be interpreted as a forest with tigers, but they are actually the name of a famous golfer. Because of this capability, our system can enable publishers to match advertising to content in real time."
How much does this improve the ability of publishers to earn money from advertising?
"There are customers who will tell you that in this way they can switch up to 70% of their content to more profitable categories by matching specific content to the advertiser."
Who are your customers?
"We focus on the large publishers. Some of them don't want to be named, but the latest large contract was signed with Newsweek. We are providing them not only with the ability to match content to advertisements, but also with the ability to distinguish whether the content is positive or negative, and not to put advertisements if the content is negative. For example, in the case of the story about the plane that crashed into the Hudson River, airlines will clearly not wish to advertise themselves alongside such a report. We make that possible."
Who are your competitors?
"At present, the big players aren't active in this field. They provide technology, like Google, but I believe that in the near future they will all switch to semantic advertising. If the evolution of online advertising started with contextual advertising and went on to behavioral advertising, semantic advertising is the next wave, and we hope to lead it."
According to Solomon, the capital raised will enable the company to expand its sales and marketing efforts while continuing to develop the technology.
Izhar Shay, a partner at Canaan Partners, which first invested in Peer39 a year ago, said, "In our view, the company represents huge potential. It has a large market, which continues to grow rapidly, smart, unique technology, a profitable business model, and a good team of founders and managers. It's marked as one of the stars in our portfolio."
Published by Globes [online], Israel business news - www.globes.co.il - on May 27, 2009
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