Ad-funded mobile network Blyk raises €40m with new partnership strategy

Rating: Massive round of funding accompanied by new expansion strategy and “streamlining”

Finland based mobile network Blyk offers free talk-time and messaging to UK subscribers in return for targeted ad placement. Launched only slightly over a year ago, and already boasting 200,000 subscribers, Blyk recently announced that it has secured a further €40m ($50m) from VCs. However, along with this news has also come two interesting announcements. The first is that Blyk will be “streamlining” its operation… or letting people go, as you would call it outside of a press release. The second is that it is adopting a new “media partnership strategy” to help it collaborate more closely with the companies whose talk and text time it’s been purchasing.

From the release:

“The advertising industry and operators have expressed a strong interest in bringing Blyk into new countries and €40 million in additional funding demonstrates the commitment by investors to the Blyk media model.” said Pekka Ala-Pietilä, Blyk’s CEO and Co-founder. “However, we like everyone else are feeling the impact of the world’s financial situation. As a result, in parallel to securing the new investment, we’ve taken decisive steps to cut costs and streamline our organization.”

“We have a winning formula which makes Blyk attractive globally. The Blyk media model, which is based on highly relevant messaging, has proven to be an extremely effective form of advertising to the youth audience.” said Antti Öhrling, Blyk’s Co-founder and Executive Director. “Blyk’s new partnering strategy will make this powerful model available for operators, brands and young people around the world.”

What we think?

The new partnership strategy looks like a good next step for Blyk. By getting closer to those companies whose networks it’ll be operating on, Blyk will be able to speed up it’s expansion in new countires and arrange even better advertising opportunities. But how big will Blyk need to get before it doesn’t need a company to piggy-back the service anymore? Could this be the first step towards Blyk becoming its own, independent, service provider with its own network? That would take a hell of a lot of capital investment. But we are talking about a completely ad-funded company which has just raised €40m at a time when ad-funding is being hit hard by global recession.

Keep your eyes on this one. Blyk sound like it has a very definite plan, and we’re only in the opening steps.