Ybrant raises Rs 125cr to fund buyouts

Business Standard

Hyderabad, June 02, 2009 – Hyderabad-based provider of digital marketing solutions Ybrant Digital has raised $25-million (approximately Rs 125 crore) from a Hong Kong-based private equity player to fuel in-organic growth plans, said its chairman and managing director Suresh Reddy.

“Our growth strategy is driven by acquiring capabilities and geographical presence. We are evaluating a few companies to complete our capability matrix. We are currently in talks with an advertising network company in the Asia Pacific region – which is primarily into banner and keyword search – for acquisition and are hopeful of sealing the deal besides setting up an office in China by this year end.” he told Business Standard, while declining to spell out the size of the proposed transaction.

Once through, this will be Ybrant’s sixth buyout so far. In 2006, Ybrant had acquired two companies – Serbia-based Seenietix’s flagship email marketing platform VoloMP and US-based MediosOne for undisclosed amounts. In 2007, it acquired US-based online ad-network company AdDynamix for $10 million (about Rs 50 crore) and Israeli company Origian for $1.3 million (Rs 65 crore). Early this year, it bought dream ad, an Argentine advertising network company, in an all-cash deal for an undisclosed sum.

“The proposed acquisition will bring about 300 active clients into our fold and enable us to penetrate the region, which has an Internet audience of 416 million,” Reddy said.

Of the total advertising spend of $453 billion globally, including newspapers, outdoor, Internet and magazines, Asia Pacific accounts for about $99 billion. While the digital marketing spend is pegged at $60 billion world-wide, it is estimated to be $23.4 billion and $14 billion in the US and Asia Pacific respectively, with Asia Pacific (excluding Japan) expected to experience a compound annual growth rate of 25.4 per cent by 2011.

The company, which draws 20 billion impression every month, has started moving from brand advertising to performance marketing (also called affiliate marketing – an Internet based marketing exercise where a business client rewards an affiliate for each visitor brought about by the affiliate’s marketing efforts) courtesy the declining advertising spend due to the slowdown, he said.

“In the past, our revenue break up from brand and performance marketing was 75:25. The mix has gone to 40:60 from the last quarter and the shift is expected to continue further,” Reddy added. Ybrant Digital posted a $55-million (Rs 275 crore) topline for the financial year ended March 2008.