Web Ad Exchange OpenX Adds Dentsu as Investor

Agency network joins latest funding round

Last month, the independent Web ad exchange OpenX landed a $22.5 million funding round. Now, the company has added a key new investor: Dentsu’s digital subsidiary Cyber Communications.

Dentsu’s investment “provides another layer of trust and closeness between the companies that allows both sides to share long-term plans and collaborate,” said OpenX CEO Tim Cadogan. The cash infusion theoretically also provides OpenX with a solid endorsement from the agency world. In September 2010 Dentsu and OpenX had partnered on a Japanese real-time ad exchange. That partnership eventually expanded to mobile and Southeast Asia a couple months ago, Cadogan said.

The agency network is the second OpenX partner to subsequently become an investor in the company, which is a challenger to Google's leading AdEx exchange. The first was Samsung Venture Investment Corporate, which led the round Dentsu is participating in.

Cadogan wouldn’t comment on the size of Dentsu’s investment, but it seems to be a little north of $5 million. Last month OpenX said it had raised $70 million in funding to date; the company has updated that figure to more than $75 million after factoring in the Dentsu deal. The new capital will be put toward hiring and merger and acquisition opportunities.

“We’re particularly interested in the mobile space to accelerate further there,” Cadogan said, noting that OpenX doubled its number of employees last year. The company is profitable and has as doubled its annualized revenue run rate from the $100 million the company reached in Q4 2011, churning through 4 trillion ads a year and more than 1 million bids per second.

Dentsu is the latest in a series of atypical investors OpenX has brought on board over the past couple years. In 2011 SAP led a $20 million funding round, and Samsung Ventures led last month’s round. “We really like having a slightly different composition of investors. We already have terrific classic VC backers like Accel [Partners], Index [Ventures] and so on. What we sought to do in the last couple rounds was bring in major global companies to learn from and deepen our partnerships,” Cadogan said. Samsung and OpenX teamed last year to set up a mobile ad exchange for the manufacturer's smartphones.