JumpTap, a white label search engine that is wooing telecom carriers by offering an alternative to Google, has landed $26 million in new capital, the company said Tuesday.
The venture capital arm of mutual funds manager AllianceBernstein led the D round, which was joined by prior investors General Catalyst Partners, Summerhill Venture Partners, Redpoint Ventures, Valhalla Partners, and WPP. In October 2006, Valhalla led a $22 million C round for the firm, which was co-founded by General Catalyst.
The latest financing comes just days after published reports that No. 2 wireless carrier Verizon is close to a deal to make Google its preferred mobile search engine. Mobile carriers such as Verizon and JumpTap customer AT&T and search providers such as Google and Yahoo are jockeying for position in what is expected to become a multibillion-dollar wireless search market.
“This is a space that we’ve seen heating up a lot recently, just in the last three or four months,” said Joe Kestel, director of consulting and industry analysis at New Paradigm Resources Group, a Chicago consultancy. “It’s one of the major battlegrounds in the industry.”
The stakes are large, said Dan Olschwang, chief executive of JumpTap, based in Cambridge, Massachusetts.
Research firm eMarketer said that global spending on mobile advertising was more than $2.7 billion in 2007 and forecast it to increase to $4.8 billion in 2008 and to $19.1 billion by 2012. “What is really exciting about mobile advertising is its ability to eclipse Internet advertising,” Mr. Olschwang said.
While Verizon reportedly is seeking to maximize revenue by contracting Google to provide mobile search, other carriers may want to retain more control by choosing a white-label carrier like JumpTap.
“One thing I know that is attractive about JumpTap to operators is that user data remains with the operator themselves,” said Mr. Kestel, who estimated that middlemen like JumpTap capture 10-20 percent of the revenue generated by mobile advertising and content.
Four-year-old JumpTap, whose carrier customers include Virgin Mobile, TeliaSonera, and US Cellular, also provides advertising services for such companies as Fox Mobile Entertainment.