gWallet raises $12.5M for more ethical virtual currency/offers system (via postie)
gWallet has raised $12.5 million for its brand-friendly offer platform for monetizing social games with virtual goods. The company hopes to set itself apart as the “cleaner” way to monetize games without running into allegations of scamming consumers.
Social games are taking off on platforms like Facebook. While the games are free, consumers can buy virtual goods in the games such as gifts for a friend or weapons. And they can pay for them with credit cards or by participating in special advertising offers. Some of those offers have been scandalous, so gWallet is proposing a way to curb abuses that popped up in recent weeks.
San Francisco-based gWallet raised the money from Adams Street Partners, Trinity Ventures, Stanford University and others. It is the third Internet startup entrepreneur Gurbaksh Chahal, who started ClickAgents at the age of 16 and sold it to ValueClick for $40 million two years later. He sold behavioral ad network Blue Lithium to Yahoo in October, 2007 for $300 million.
His new company claims to be the “leader in cleaning up the virtual currency space,” which through its connection with special offfers has caught a lot of negative publiccity for alleged scams in social games. gWallet claims it has proprietary technology and strict ethical standards that will make social media more palatable to big brands. The company will use the money to open offices in Europe to help bring more brands into social media.
The company says it works with brands directly as opposed to the current affiliate model, allowing for a single point of accountability and transparency when it comes to making offers to consumers in an appropriate way. It will thus hire its own direct sales force.
Rich LeFurgy, founding chairman of the Interactive Advertising Bureau, which is a watchdog group for the ad industry, is an advisor to gWallet. A couple of weeks ago, working with social networks such as Facebook, rival Offerpal Media also set up a new standards system to make sure its offers are legitimate. The company said it is on the lookout for acquisitions.
gWallet has 20 employees and was founded earlier this year. Besides Offerpal, rivals include Super Rewards (owned by AdKnowledge) and Gambit.
