Monday, March 30, 2009

InStream Media lands $2M from local VCs

By Galen Moore

CommonAngels Inc. and Stage 1 Ventures LLC have invested about $2 million in inStream Media Inc., a Waltham-based maker of software that prints targeted ads on store receipts, according to inStream officials.

Founded in 2007, inStream makes software that targets ads to customers at the point of sale based on factors like store location, time of day, how much the customer is spending and what he or she is buying. The ads are printed in bitmap format on the front of customer receipts by the store’s existing point-of-sale system.

“Retailers need new ways to generate revenue, and advertisers need a better way to target,” said president and CEO Ann Raider. “They are not able to spend efficiently in broadcast media.”

The business targets mostly large retail chains and midsize specialty chains. The ads can generate revenue dollars in the millions per billion transactions, Raider said.

Raider was formerly chief strategy officer at Vertis Communications Inc., a Thomas Lee Partners portfolio company in Baltimore, Md. She was also co-founder of Consumer Card Marketing Inc., a Braintree-based company that sold to News Corp. (Nasdaq: NWSA) in 1999.

Executive vice president Paul Harkins is inStream’s founder. Harkins was formerly president of The Schubert Group LLC, a New York-based management firm specializing in corporate restructuring.

As part of the funding, Waltham-based Stage 1 Ventures’ David Baum and Lexington-based CommonAngels’ Jonathan Green will join the company’s board of directors, according to a company statement.

The company, which currently employs seven, expects to double in size by the end of 2009, with hires taking place mostly in its sales and technology divisions, Raider said. Most of the funding will go toward business development, she said.