Summary:

Phorm, the controversial targeted web ads company that fled to Brazil after privacy concerns blocked its domestic UK fortunes, is taking yet…

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Phorm, the controversial targeted web ads company that fled to Brazil after privacy concerns blocked its domestic UK fortunes, is taking yet another big fundraising as it goes on trying to finance its expensive global search for business.

This time, it is raising £30 ($47.7) million, which will be used partly to repay a £16 ($25.44) million convertible-notes loan it took out this March and partly “to provide sufficient working capital to get to positive operational cash flow”. It is planning a cash burn of £1.1 ($1.75) million per month for the next year.

At this point, you could be forgiven for having lost track of how much money Phorm has raised and how much equity it has given out to finance its ongoing hefty losses. But paidContent has previously reported Phorm took a total £53 ($84.28) million between 2005 and 2010. The recent loan and latest funding bring that total to nearly £100 ($159.01) million.

The company had never recorded any revenue until the first half of this year, just $17,336. (£10902.53) In 2010, Phorm lost $28.6 (£17.99) million.

That £100 ($159.01) million number is also the same price tag the company is now putting on itself, saying that the new shares mean its equity is priced at £1 ($1.59) million for each one percent of the company. For example, Phorm board member Mark Schneider is himself investing £1 ($1.59).6 million of the money for 1.6 percent of the company. Blackrock is investing £7 ($11.13) million in cash.

Of course, to go on raising money, the company keeps having to enlarge its issued share capital. Before this latest fundraising, the company’s market cap was only £28.2 ($44.84) million. The company says it wants to buy back some of the new shares if starts making money.

Phorm’s technology uses ISPs’ data of their subscribers browsing habits to better target ads served through partner publishers. The idea promised to increase advertising rates for publishers and click-throughs for advertisers.

Despite Phorm softening the service in response to privacy concerns, three UK ISPs who trialled it decided not to go deploy it. Phorm moved operations to South Korea but the same happened. So it moved to Brazil.

Now operating on an opt-in basis, Phorm has finally gained actual commercial roll-out with Brazilian ISPs Oi and Telefonica (NYSE: TEF) and with Romania’s Romtelecom. With them, Phorm says opt-in rates have met or exceeded targets, advertiser prices have been “significantly higher than forecast” while publisher costs have met or undermet targets.

Phorm is a massively high-stakes game of potential and hope. The least you can say for CEO Kent Ertugrul is that he never gives up. If Phorm truly does end up finally working, it could generate significant business from restoring CPM growth. “The potential scale … of the Brazilian business could be £7 ($11.13)03 million… The (value) of Romania could be £78 ($124.03) million,” Phorm itself forecasts modestly to investors. These targets are based on Phorm scaling up from small, post-trial deployment to large-scale adoption.

Phorm says discussions with other global ISPs have also continued for the last three years. It plans to roll out in China and a southern Europe country early in 2012. It also says it is due to deploy in a southern Europe country it values at £483 ($768.01) million and a south-east Asian country it values at £82 ($130.39) million early next year.

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