Very big news today for the mobile advertising world, and a major boost for the mobile ad network InMobi: the company has just announced that it has raised a massive funding round — $200 million — from the Japanese company Softbank Corp. The value is a sign of how much hope and expectation is being put on the mobile ads industry in the wake of the smartphone and tablet boom: today mobile advertising is still only a small part of the revenues being generated in mobile.
This is by far the biggest mobile investment of the year in the mobile sector, and one of the largest VC deals overall in 2011.
The money will come to InMobi in two tranches, the company says: $100 million this month, and another $100 million in April 2012.
InMobi says that it will stay fully independent throughout — although funding like this will help it massively in its bid to compete with the Googles and Apples of the world — as well as the larger independents like Millennial Media — as it has never done before. The company says it currently gets around 47 billion ad impressions monthly — about half of what its biggest independent competitor, Millennial, gets.
The money will be used to hire more people in four key areas where InMobi has been operating: North America, China, Korea and Europe. And it will, of course, be used for more acquisitions and for R&D, specifically in areas of new technology like mobile payments, rich-media advertising on the HTML5 platform and ad distribution (building on InMobi’s recent acquisition of Sprout).
It looks like Softbank is the only investor in this current round. Existing investors included Kleiner Perkins Caufield & Byers and Sherpalo Ventures.
Softbank’s interest in the company is two-fold:
The Japanese group keeps a strong portfolio of VC investments in promising companies worldwide (one of the most recent investments was in the shopping site Gilt, for $62.5 million).
But it also has its own mobile and internet operations in its home market — these include a mobile service that was formed from its acquisition of Vodafone (NYSE: VOD) Japan (only just completed towards the end of 2010); and its longstanding broadband and Internet venture in the country with Yahoo (NSDQ: YHOO) — although there have been questions about whether Yahoo intends to stay involved, which are likely to be renewed again now with the CEO change at Yahoo.
As it is with the rest of the world, the mobile advertising market is just kicking off in Japan: companies like Apple (NSDQ: AAPL) only ventured into the market last year (in a JV with Dentsu). According to figures from Gartner, Japan and the rest of Asia will account for nearly half of all mobile advertising revenues in 2011, or $1.6 billion.