Mumbai-based Vserv Digital Services Pvt Ltd has completed its series A round of funding to the tune of $3 million from technology venture capital firm IDG Ventures India for an undisclosed stake.

Manik Arora and Karan Mohla from IDG Ventures will be joining Vserv’s board of directors.

Incidentally, Ajay Adiseshann, founder and managing director of mobile payment company PayMate, has recently invested an undisclosed amount in Vserv.

Established in January, 2010, by Dippak Khurana and Ashay Padwal, the start-up claims to have as many as 50 ad clients and delivered six billion ad requests in South-East Asia and India, as of May, 2011. Vserv’s solution App Ad-Wrapper for J2ME apps enables developers to monetise their apps with minimal effort and provides advertisers with a unique medium to target the rapidly growing mobile audience. According to data from VCCedge, our financial research platform, Vserv had registered losses of Rs 12 lakh for fiscal 2009-10. And the company is not currently profitable.

With the fresh cash infusion, Vserv plans to expand its sales and engineering teams to drive sales growth in India and abroad and further develop its solutions. Dippak Khurana, founder and CEO of Vserv, said, “Our App Ad-Wrapper technology for J2ME apps has been well received by the global developer community as it can support over 500 phone models and allows both new and existing apps to be Ad-Wrapped and monetised. With this funding, we will extend our offerings to Android apps, which are increasingly becoming important in emerging markets.”

Vserv plans to expand to South-East Asia, the Middle East and Africa – markets which have a good overlap of J2ME and Android phones. 

“In terms of critical size of user base, emerging markets will grow in J2ME and Android phones while mature markets will see iPhones and Android. Hence, we focus on the Android platform,” explained Khurana.

Manik Arora, founder and managing director of IDG Ventures India, said, “While the mobile advertising industry is still relatively young, it is experiencing rapid growth driven by the growth of mobile Internet and mobile apps. Within this space, emerging markets are critical, given their large and growing mobile phone bases. In fact, India is the largest market for J2ME app downloads. Having researched this dynamic market for the last year, we have found that Vserv is taking a leadership role from India and starting to expand to emerging markets abroad. We look forward to partnering with co-founders Dippak Khurana and Ashay Padwal to help them achieve their vision for Vserv.”

IDG Ventures India invests in technology-related products and services companies in the country, the most recent being a funding of $5 million in Agile Financial Technologies, a software developer. Other portfolio companies include 3DSoC, Apalya, Aujas Networks, ConnectM, iCreate, iProf, iViZ, Kreeda Games, Manthan Systems, Myntra, Ozone Media, Perfint and Sourcebits.

It has also invested in online ad network Ozone Media Solutions Pvt Ltd, which will complement the mobile focus of Vserv. There is a possibility of the two companies working together in the future, according to Arora.

The worldwide mobile advertising revenue is expected to exceed $3 billion in 2011, with the Asia-Pacific claiming half the market share. The global in-app advertising (where ads are placed within an app or game) market will grow from $900 million in 2011 to around $5 billion in 2015, according to research firm IDC.

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