Bluestreak Nabs $16.5 Million in Second-Round Financing

In a development that helps it stay afloat and move into new media, Rich media ad technology firm Bluestreak secured $16.5 million in institutional financing from existing investors and two new venture firms.

New York-based StarVest Partners and CIT Venture Capital led the funding, joining Lazard Technology Partners and Zero Stage Capital, which led Bluestreak’s initial $7 million round of financing in January.

“This financing will allow us to continue to provide our current advertising partners, and future customers in other communications mediums, with a leading technology infrastructure that delivers the maximum return on investment,” said Bluestreak president and chief executive officer Annette Tonti.

StarVest founder and co-chair Jeanne M. Sullivan will join the firm’s board of directors as part of the deal.

Bluestreak, which is headquartered in Newport, RI, said it would use the funds principally for sales and business development, but also to expand the emerging media penetration of its Bluestreak ad server, which delivers its proprietary rich media, transactional ad format.

Interestingly, in announcing the financing, Bluestreak calls itself an “online advertising and marketing infrastructure company” where it had previously described itself as “a technology-based marketing solutions and services company.” The change in positioning is likely due to the latest fashion of becoming an “infrastructure play,” at a time when the environment for online advertising companies is harsh.

Additionally, Bluestreak also seems to be selling itself as an end-to-end infrastructure provider, with its banner ad creation tools, its ad serving system, and its optimization technology. With such a strategy the company puts itself into competition with any number of larger players in the industry, including DoubleClick, 24/7 Media, Mediaplex, and Avenue A.

The company’s executives said the firm doesn’t have plans to go head-to-head with its larger peers; instead, Tonti said that for the meantime, it will focus on being a niche, rich media play.

“The company is already at the forefront of the projected $16.5 billion online advertising industry, and we are confident that it will not stop there,” said Scott Schneiderman, vice president of CIT Venture Capital, a unit of commercial finance firm CIT.

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