Prostor Capital announced yesterday that it has purchased a 25% stake in online ad management startup CPAExchange in a seed funding round. Neither the exact amount of the investment nor the company’s valuation have been disclosed.
Founded in 2012, CPAExchange is a service that allows customers to place and manage advertisements online using the click-per-action model (CPA). The investment will be used for improving the company’s real-time-bidding (RTB) platform, which allows CPAExchange to buy more traffic from major networks such as Yandex, Google and Begun.
CPAExchange expects to have a 20% share of the local CPA advertising market in two years.
The market, however, is close to saturation, according to Bas Godska, Mythings’ managing director for Russia & CIS. “We were the first in Russia to deliver RTB+CPA generated sales to e-commerce clients already back in 2011. Now we service approximately 50% of the top 100 internet shops,” he claimed in an exchange with East-West Digital News.
“I am not convinced yet another player in this segment will drastically change the landscape for clients for the better, as superfluous RTB-bids on the same impressions and risks of duplicate sales attribution could increase,” Godska believes.
More deals to come
Prostor’s investment in CPAExchange marks the beginning of this $20 million fund’s expansion into the field of online advertising.
“We have allocated several million dollars for investment in the ad segment this year and have been negotiating terms with a number of companies,” the fund’s Senior Associate Stanislav Kosorukov told EWDN. “I believe we’ll close two or three more deals this year.”
Over the last three months, no fewer than four Russian online marketing startups have attracted funding from other investors, judging only by publicly disclosed deals. These include social shopping advisor SocialMart, contextual ad solution provider Alytics, advertising tech startup Garpun and, most recently, social network advertising platform Hiconversion.
The fastest growing segment of the Russian advertising market, online advertising neared $2 billion in 2012.
