Mobile Acquisition: Velti Buys Ad Infuse

Mobile marketing firm Velti has purchased Ad Infuse, which offers a mobile ad management platform. The acquisition will strengthen Athens, Greece-based Velti’s U.S. presence and round out its product offerings.

Velti offers a self-service platform for planning, executing and reporting on mobile campaigns, but it lacked powerful ad management functions. “It’s something the customers have been wanting for a long time,” said CEO Alex Moukas.

Ad Infuse’s products include ad management tools for advertisers, a content publishing tool, and a solution for carriers to monetize their decks. The Ad Infuse platform has the ability to insert ads in video clip downloads, mobile games, streaming video, and WAP sites. Moukas said the company stood out in part because it has successfully won contracts with AT&T, Swisscom, France Telecom, Orange. The company’s advertiser-side partners include Dell and Procter & Gamble.

Ad Infuse CEO Brian Crowley will assume the position of general manager of Velti North America. Prior to the acquisition Velti had just shy of 400 employees in 15 countries. With the addition of Ad Infuse its headcount will grow to about 425 people and it will add Ad Infuse’s offices in San Francisco and London. Moukas said those offices will eventually be merged with Velti offices in the same cities, possibly in new locations for both companies. “We’re also going to be significantly increasing the San Francisco headcount over the next several months,” he said.

Velti boasts more than 250 clients, including Microsoft, Disney, Unilever, Orange, Singtel, MasterCard, and CBS.

Ad Infuse was purchased in an all cash transaction, the value of which was not disclosed. It was backed by Storm Ventures, ComVentures, and SoftBank Capital. All three Silicon Valley investors exited as a result of the sale.

The two companies have been in negotiations for months. “Our lawyers have been fighting with each other, but we have been working on integration to make sure things are underway,” said Moukas.

Mobile advertising is forecast to slow this year, but Velti’s outlook may be sunnier. In 2008 the company posted sales of $70 million, and it expects first quarter 2009 results to surpass the year-ago period by 50 percent.

“More than two-thirds of our revenue is performance-based; we only make money if our customers make money,” said Moukas. “We structure our fees very low…so that the customer only pays us if they make money. In this environment it makes it easier.”