As the virtual goods market continues to expand at a torrid pace both worldwide and in the US, the competitive landscape for virtual currency monetization is only getting more fierce. Earlier this month, we profiled SponsorPay, a venture-backed startup focusing on Europe, as it came out of stealth mode. Now, San Francisco-based gWallet is revealing new details on its plans for the first time.
gWallet, which in previous iterations was focused on building a coupon marketplace, is founded by Gurbaksh Chahal, the experienced advertising entrepreneur who founded Click Agents in 1999 before merging it with ValueClick in 2000 for $40 million, and later founded BlueLithium in 2004 before selling it for $300 million in 2007 to Yahoo. Now, he’s setting his sights on the virtual currency monetization market.
“The virtual currency market today is kind of like the wild west,” Chahal says. “You have so much supply being created by so many games, and soon other verticals, but the only way it will work in the long run is if you can use technology to connect an advertiser to a user, providing value the advertiser can understand.”
While Chahal isn’t ready to share too many details on the fundamentals of gWallet’s technology platform, he says an important part of the company’s plan is connecting publishers directly to advertisers.
“The bigger challenge here is that right now the marketplace is relying on affiliate networks to fund the offers. The supply is there, but the demand is where the problem exists. We’re bringing a long term perspective on how to attack this problem.”
gWallet currently has 20 employees in San Francisco, and is being boot-strapped by Chahal. However, he says the company will likely raise a big round in the next few quarters. Chahal’s previous companies followed a similarly steep growth trajectory.
For now, Chahal says the company is focusing on rolling out its service to social network apps and games, but it has its eyes on serving broader markets.
“We think the opportunity is a lot bigger than just Facebook or MySpace, but that’s where we’ll begin. Our thesis is that inventory will continue to grow, and more verticals will adopt virtual currency. We’ll go into virtual worlds, wifi hotspots, anything that has a microtransaction environment,” Chahal says.
We’ll keep you posted as things progress with the company. For now, gWallet joins a list of virtual currency monetization platforms racing to capture the social app and gaming market, including Offerpal, Super Rewards, AdParlor, Sometrics, Peanut Labs, TrialPay, SponsorPay, and SupersonicAds, among others.