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Verizon's Venture Arm Backs Mobile Startup Jana, AOL's Tim Armstrong Joins Advisory Board

The telco now has a stake in the company selling mobile ads to the developing world.

Asa Mathat

Jana, a mobile startup that works in developing countries, has a new influx of cash and an old industry hand as a new adviser.

And Verizon has a new potential avenue to reach consumers across the world as it ramps up its digital ad and media efforts.

Verizon Ventures, the telco’s investment arm, has led a $57 million Series C round in Jana, a Boston-based startup that facilitates mobile ads in over 90 countries. Tim Armstrong, CEO of Verizon’s AOL unit, is joining Jana’s advisory board.* (It’s in a personal capacity, not at Verizon’s directive, per a Verizon rep.)

Jana CEO Nathan Eagle said the company would primarily deploy the cash to create a sales force, including starting teams in key markets like India and Brazil. It will also tap the funds for its initial expansion into China, which Eagle said is coming in the second quarter.

"Building out that sales part of our business is critical," he said. "That’s actually why we’re so excited about having Tim Armstrong join us. He’s the pioneer in digital advertising."

Jana’s business is built on a simple solution to the most perplexing problem for Internet services in emerging markets: The high cost of data. With its main app, mCent, Jana covers the data costs for mobile users; advertisers sponsor the sessions. Ad giant Publicis, whose CEO, Maurice Lévy, sits on Jana’s board, also participated in the funding round along with Spark Capital.

Jana claims 30 million monthly users, but declined to share its revenue figures or valuation. However, Eagle said the company has had "profitable quarters recently."

As a mobile ad business, Jana is going up against the twin giants Facebook and Google. It has managed to get some traction in an area — mobile revenue in emerging markets — where the giants have stumbled. Facebook’s recent regulatory blockade in India may benefit Jana, which says it avoids a similar ban because its service subsidizes data for users on the full mobile Internet, unrestricted.

A Verizon rep stressed that the funding is purely an investment and not indicative of the telco’s broader strategy. But the telco has accelerated its efforts to soak revenue from phones, including with mobile ads, since the purchase of Armstrong’s AOL in May.

I asked Eagle why Verizon did not just buy his company outright. "We’re not for sale," he replied. "We exist to do one thing: Give a billion people Internet access."

*An earlier version of this article said Armstrong was joining the company’s board of directors. He’s joining the advisory board.

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