Mobile Video Ad Net Rhythm NewMedia Raises $10 Million

With mobile advertising starting to come into its own, Rhythm NewMedia has raised another big round to support the sudden demand from big marketers. The Mountain View, CA-based company, which specializes in mobile video advertising, has raised a $10 million third round from previous backers Lightspeed Venture Partners, Morgenthaler Ventures and Rembrandt Venture Partners. In particular, the demand for mobile video ads is being driven by Fortune 500 companies, said Ujjal Kohli, Rhythm NewMedia’s CEO.

About two years ago, the growth of the mobile ad market, let alone the video portion, was not so assured. As a result, Rhythm New Media decided to pull out of the UK and India markets to concentrate solely on the U.S. in Aug. ’08. Despite the interest in mobile advertising globally, the U.S. is still the safer bet.

The company claims its video ad network averaged 425 million monthly impressions in Q3, and grew roughly 30 percent from Q2 to Q3. Rhythm New Media is particularly focused on serving in-stream, pre-roll video ads across Android, iPad, iPhone, iPod Touch and Android.