Tapjoy Raises $21 Million to Fuel Growth on Mobile Platforms

Tapjoy, which helps mobile developers drive installs of their applications, raised $21 million from Rho Ventures and other earlier investors including D.E. Shaw Ventures, InterWest Partners and North Bridge Venture Partners.

The company will use the funding to pull ahead of competitors in becoming the largest pay-per-install network and in turning into a record label of sorts for mobile developers by securing exclusive agreements to distribute their work. With the round, Tapjoy’s total funding comes to $40 million.

We covered the story of Tapjoy’s big shift to mobile from serving offers on the Facebook platform on Monday. (Be sure to read it here.) The company, which used to be called Offerpal, was known as the biggest partner to social gaming companies in alternative monetization. Instead of paying for virtual goods, users could sign-up for offers.

But slammed by accusations that they ran offers that burdened users with undisclosed charges, the company changed leadership twice and found a new business model in an acquisition they made almost a year ago. They had acquired a tiny company called Tapjoy to get a foothold onto mobile platforms. It ended up evolving into the majority of their business. So the company renamed itself, restructured and relocated to San Francisco.

It now helps drive discovery of mobile apps, which is a problem plaguing developers. When apps aren’t in the top of the charts, it’s hard for users to discover them. So Tapjoy cross-promotes them in other apps in its network. When users want extra virtual currency or rewards, instead of paying, they can download another app. Developers pay for installs instead of for impressions or clicks like they would with other advertising networks.

With more than 5,000 apps, Tapjoy has the power to push apps into the Top 25 of Apple’s charts. They’ve also moved into other products that help developers power their virtual goods stores and they bought a cross-promotion company Appstrip.