Adsmarket Raises $17 Million

TEL AVIV (Reuters) – Israeli Internet advertising group Adsmarket expects sales to jump by a third in 2010 as it expands into rapidly growing markets in the United States and Latin America, its chief executive told Reuters on Monday.

“We want to build a global company,” Ofer Druker said. “In the beginning of the year we established an office in Madrid. We will establish a business in Mexico in the next few months and in the beginning of next year we’ll launch activity in Brazil.”

It plans to open a business development office in the United States by the end of this year as well.

Founded in 2007, Adsmarket expects to post sales of $80 million in 2010, up from $60 million last year. The company is profitable, Druker added.

To help finance its expansion, Adsmarket will use part of the funds from a $17 million investment by Viola Private Equity.

Viola, which will hold 21 percent of Adsmarket, will spend $12 million to buy shares from existing shareholders and invest $5 million in the company, Adsmarket said. Following the investment, it will be valued at $80 million.

Adsmarket Chairman Ilan Shiloach, head of Israel’s top ad agency, McCann Worldgroup Israel, will hold a 29 percent stake.

Adsmarket enables advertisers to market goods and services through its network of online publishers. The company earns a commission for every transaction completed via its platform.

It is the third-largest player in “affiliate” advertising in Europe after Sweden’s TradeDoubler (TRAD.ST) and Berlin-based Zanox, a joint venture between German media group Axel Springer (SPRGn.DE) and Swiss PubliGroupe (PUBN.S).

Commission Junction, a subsidiary of ValueClick (VCLK.O), is the world’s biggest player, Druker said.

The affiliate market accounts for 9 percent of the $84 billion in global online ad spending. It is growing 15 percent a year and is expected to reach $9.5 billion by 2012.

Adsmarket has over 300 advertisers, mainly in the mobile content, games, education, travel and fashion industries. It has a network of a few thousand publishers.

Viola Private Equity, a buyout and growth capital technology fund, is an affiliate of the Viola Group, a private equity investment firm with over $1.8 billion under management. (Editing by Michael Shields)