Blog Post

Offer-Based Ad Network gWallet Raises $12.5 Million In Funding

While Offerpal struggles with its image-problem, and Zynga and Facebook deal with a class-action lawsuit, a new offer-based ad network is getting funding. gWallet, a virtual goods and online games monetization platform, has raised $12.5 million in its first round of funding. Adams Street Partners and Trinity Ventures led the investment, Stanford University also participated. S.F.-based gWallet will use the money to set up offices in NYC and London.

To mitigate claims of “scams” that bill people without full disclosure, or offers that don’t deliver as promised, the company brokers deals directly with brand and direct response advertisers itself, instead of just automatically buying unsold inventory. gWallet also runs a “transparent” platform, meaning both game developers and the social networks can scan through the offers and ads themselves. Zynga founder Mark Pincus, among others, maintained that a big problem with offer-based ad networks was that they failed to give the developers control over the quality of the ads that ultimately got served to players.

gWallet was founded this year by Gurbaksh Chahal; Chahal has plenty of ad network experience, having founded ClickAgents, which sold to ValueClick (NSDQ: VCLK), and behavioral targeting network BlueLithium, which *Yahoo* bought for $300 million in 2007.

Both publishers and advertisers had concerns about transparency and ad quality as ad networks grew in popularity, so Chahal said it makes sense that the offer-based platforms and social networks would be struggling with the same issues right now. “It took time for the ad networks to build trust with big brands as well as publishers,” he said.

gWallet also counts Rich LeFurgy, founding chairman of the IAB, as one of its advisors. The company is planning an international expansion in 2010, along with the launch of new targeting technology and a mobile payments platform.