ADexact Lands $5.5 Million

Start-up ADexact will gain funds to help fuel the testing and eventual rollout of its interactive television advertising product, thanks to a $5.5 million round of financing led by Toronto-based RBC Capital Partners.

Waterloo, Ontario-based ADexact makes targeting software for cable, satellite and broadcast operators to target ads — which could boost operators’ revenue per subscriber and increase the effectiveness of advertising, ADexact said.

The year-old firm added that the new funding from RBC Capital partners — the private equity arm of Canada’s Royal Bank Financial Group — should help it continue its technology trial, currently under way in conjunction with an undisclosed North American broadcaster.

While interactive TV and targeted cable spots likely are years away from fruition, the area is seen as lucrative territory for not just cable and set-top-box technology firms, but also for software plays in the Internet advertising space.

Companies like DoubleClick, 24/7 Media and Engage say they currently market Web advertising systems that deliver targeted banner ads, but which also can deliver targeted iTV ads with little or no modification. Additionally, other firms — such as Alley-based ACTV, which has a partnership with iTV firm OpenTV — focus purely on interactive TV ads.

But while ADexact likely will face sizable competition, the company is aiming to make a splash of its own. The firm’s president and chief executive, David Roussain, said the firm is already in talks with U.S.-based cable operators for a domestic product rollout following its trial.

“We think we’re uniquely positioned with the type of system that we have,” Roussain said. “We can work with the various iTV systems to create a targeted advertising system within [a cable operator’s] operations. Regardless of whether they’re using OpenTV, Microsoft or Liberate, we have the ability to use their iTV systems to coordinate the matching and targeting of advertising.”

In addition to being able to support multiple iTV formats, he added that ADexact can also link to operators’ existing traffic and billing systems.

RBC Capital Partners’ other investments include broadband IP applications and delivery firm March Networks, chipmakers SpaceBridge and Zucotto, and Cambrian Systems, which was acquired by Nortel Networks in 1998.