VentureBeat

Adroll, a company that seeks to help web site publishers band together so that they’re more attractive to advertisers, has just raised several million dollars in a first round of venture capital funding.

The San Francisco company, run by Jared Kopf (left below), plays in a very crowded industry. Every day, it seems, there’s a new ad network that emerges. With the economy slowing down, there are simply too many networks, and not enough ads to go around — and so expect continued consolidation, even while advertising continues to grow online over time.

Adroll, however, is hoping to serve the mass of sites that are too small to be served by large advertising agencies, but large enough when rolled up together — according to topic niche — to merit more attention. That’s why publishers will get more than the $2 or so CPM (cost per a thousand impressions) provided by most ad networks. Adroll joins groups like Federated Media, Glam and Adify, all of which seek to round up similar types of blogs or web sites. However, FM has focused on specific industries, starting with technology news and expanding to cover areas like automotive, business, green and parenting). And Glam has focused on women’s fashion and other women’s content. Adroll, meanwhile, focuses on any topic. For example, Adroll serves a community of alternative music sites, a group of mom bloggers, and a bunch of surfing sites, to name a few. Adroll launched publicly in April, serves 1,600 publishers and caters to 250 advertisers who run ads on the sites, according to Kopf.

Unlike Federated Media or Glam, Adroll doesn’t go out and try to sell ads for the blog co-ops that have signed up with it. Federated Media and Glam charge their publishers a pretty penny for doing that (about 40 percent of the revenue they bring in), but they do come back with high-paying ads, typically $10 CPM or higher. By automating its offering, Adroll will serve ads that typically pay publishers less than that, but much more than the $2 CPM typically paid by your average ad network. It does more work than Adify, which simply provides you an ad server, but not a lot of assistance to roll up with other blogs.

The quesiton is, how large is the opportunity, and how defensible is it, at a time when all these other ad opportunities are out there for publishers to try? Kopf says some sites are making $1,000 a month — which is much more than what you’d get from Google’s Adsense, so it appears there’s at least some real value for the participants.

Kopf earlier worked with former PayPal CEO Peter Thiel, first directly assisting Thiel at PayPal but then becoming Thiel’s first employee at Clarium Capital, the hedge fund Thiel created after leaving PayPal.

The funding comes from Merus Capital, the fund started by Salman Ullah, formerly Google’s VP of corporate development, and Sean Dempsey, also formerly of Google’s corporate development group. Other investors include Thiel, Accel Partners, Mike Maples (backer of Digg Twitter), former AOL President Bob Pittman and the two brothers who were early investors in ad company Right Media. Kopf wouldn’t specify the amount, but said that it is between $2 million and $8 million. The round follows unspecified seed funding provided by Thiel.

Merus Capital, a venture firm founded by former Google and Microsoft executives, is raising $125 million for its debut fund, and has raised $10 million so far, according to an SEC regulatory filing cited by VentureWire. The firm focuses on three areas of investment — algorithm intensive software, online marketplaces and Web-based consumer software and services.

The Palo Alto, Calif, firm was founded last November by Salman Ullah (pictured, left) when he left his position as Google’s vice president of corporate development (a story that VentureBeat’s Eric Eldon broke); Sean Dempsey, who also left Google’s corporate development group; and Peter Hsing, a general manager of corporate strategy at Microsoft. Before leaving Google, Ullah was the public face of its acquisition efforts, heading the purchase of 35 companies since 2004, including YouTube.

Dempsey told VentureWire that in the short-term, Merus’ founders see opportunities in their connections with Google, particularly with Googlers leaving to found their own startups. The firm won’t be investing in any companies that are normally classified as “Web 2.0,” namely companies based around social networking and other social and collaborative tools, Dempsey said.

Limited partners in the new fund include the Freidenrich Family Partnership and Shea Ventures. Merus Capital has already made six investments, including identity theft protection startup Debix and DeviceVM, whose products load your computer faster.

Debix is one of the smartest services I’ve ever seen to combat identity theft. It can stop the theft of your identity as it happens. Today, the company is slicing its prices so that a single consumer can protect himself or herself against identity theft for $24 a year.

Debix operates an efficient electronic network that is built on the premise that while a thief can convince an institution that he is you, the thief cannot convince you that he is you. Debix provides a secure and automated phone call requesting authorization and the consumer says whether the transaction is legitimate. It verifies through your phone number and your voice whether the person being called is actually you. It can check your voice against a recording of your voice that you make when you open a Debix account.

“We think a lot of snake oil has been sold in this space,” said Bo Holland, chief executive of Debix. “We can stop fraud because we come at it from a technical and common sense point of view.”

More than half of identity theft victims reported in 2007 that their personal information had been used to start a new line of credit in their name, according to the nonprofit Identity Theft Resource Center, which provides victim support and public education about identity theft. Jay Foley, the ITRC’s executive director seems to be a personal fan of the service. “Bo has been talking to me since he came up with the technology,” he said. “It exceeds my expectations. No one else has stepped up to the plate.”

Debix’s identity protection network has been operating since January 2007. Since then, more than 400,000 paying consumers have used it and it has stopped more than 1,400 identity theft attacks, saving $9.3 million in losses, Holland said. In the fourth quarter of 2007, Debix monitored 30,000 requests for new accounts. It found 380 were frauds. Of those attacks, not a single one was successful.

If Debix detects an attack, it immediately turns the call over to one of its investigators, who collects the facts and engages law enforcement while the case is still hot.

Debix previously charged $100 a year. The company has a test drive program that users can take to understand how it works.

Under the new pricing, individuals can get Debix Identity Protection for $24 per year and families can buy Debix for less than $12 per person per year.  Small families with one adult and up to four children living in the same household costs $48 per year. Large families with up to five adults and ten children cost $144 per year.

The company was founded in 2004. It hasn’t spent any money on advertising during the 19 months the service has been available. It raised $9.3 million in May from Merus Capital and Trellis Partners. Last year, the company raised money from angels Gideon Yu, the current chief financial officer at Facebook, and Launny Steffens, a former vice chairman of Merrill Lynch & Co.

DeviceVM, a maker of software that lets you check your email, chat and surf the web within seconds of turning on your computer, has raised a small third round of funding.

The backing, $1 million, comes from Merus Capital, the new firm founded by departed business development executives at Google and Microsoft.

The company hopes Merus can use its connections with computer manufacturers to get its software more widely distributed.

San Jose, Calif.-based DeviceVM’s software is called Splashtop, and is built into the motherboards of desktop and laptop computers. It is available for ASUS desktop PCs that run Windows or Linux. ASUS plans to introduce Splashtop to its line of laptops, as well (see review here). It is also aiming for widespread adoption by other PC manufacturers around the world.

The investment is notable because it is the first investment the firm, founded by Salman Ullah, the recently departed vice president of business development at Google, Sean Dempsey, former Principal of Corporate Development at Google, and Peter Hsing, former Managing Director of Corporate Strategy at Microsoft (our coverage of Ullah’s new fund, here). Separately, Larry Augustin, founder of open source code repository SourceForge, has also joined the DeviceVM board of directors.

While Merus says it is focused on early stage investments, DeviceVM has already raised two rounds of venture funding from a large group of investors, for a total of around $21 million before the Merus investment.

The company raised more than $10 million last fall (our coverage) and another $10.5 million in 2006 (our coverage).